- Data acquired from a report by Chainalysis reveals that Indians have invested approximately $40 billion into cryptocurrencies in the past year.
- Despite the Indian government’s hostility, crypto adoption is soaring in India.
- As of now, it is estimated that more than 15 million Indian are involved in crypto.
Over the past few years, the Indian government emerged to be remarkably hostile towards cryptocurrencies. Back in 2018, the country’s central bank (Reserve Bank of India) even passed a law banning crypto transactions.
However, in 2020, the country adopted a more friendly approach, and its supreme court overturned the ban law. As a result, an outpouring of Indian investors became interested in the emerging market and got involved. While it is not clear what is coming about, the officials have been assuring that a full ban is not in the plan.
Just recently, the news leaked that the Indian lawmakers are planning to classify Bitcoin as an asset class, which is quite promising considering that the country has been holding a very restrictive stance.
Indians Are Obsessed With Crypto
A recent report reveals that Indians have invested approximately $40 billion into cryptocurrencies in the past year. Furthering that, more and more Indians believe that Bitcoin is better than gold, with some even dumping their gold to acquire crypto.
The number of Indians currently involved in buying and selling digital coins extends to beyond 15 million, right on the track to catch up with the 23 million US traders. Mainly, those aged between 18 to 35 constitute the investor class.
According to the World Gold Council, people below the age 34 are not much excited about gold. Sandeep Goenka, the co-founder of ZebPay, stated that the majority of adults in India choose to invest in crypto because it is seamless. He asserted:
They [adults] find it far easier to invest in crypto than gold because the process is very simple. You go online, you can buy crypto, you don’t have to verify it, unlike gold.
Does India Consider Cryptocurrencies a Competitor to Its CBDC?
When studying China’s vigorous crackdown on cryptocurrencies, it will be easy to conclude that the country is seeing cryptocurrencies as a rival to its CBDC (digital yuan). Is this the case with India too?
For one, India is considering developing its own CBDC. However, the country has not yet made any definitive decision. In early May, India’s Central Bank reported the pros and cons that come with CBDCs. About the cons, the bank warned that a CBDC could harm the banking system, it said:
CBDC is, however, not an unmixed blessing – it poses a risk of disintermediation of the banking system, more so if the commercial banking system is perceived to be fragile.
Considering that India is still not determined about a CBDC, it is greatly unlikely that the country considers cryptocurrencies as a rival. Plus, it is good to mention that cryptocurrencies promote digital money in India, a largely unbanked country. Thus, the Indian government can even benefit since people will educate themselves about digital money while adopting cryptocurrencies.