Cryptocurrencies are a decentralized form of digital currency running on blockchain technology used for executing transactions. They are gaining wide adoption in several regions, India being one of them. This currency has immense potential and can transform our former financial system.
The widespread use in India has come as a result of various factors. This article will review the crypto market-based in India, the extent of its usage, and some factors contributing to its growth. Read on to gain more insights.
Brief History
The Indian populace was somewhat skeptical of the whole idea of digital assets and currencies. After the launch of these currencies in 2009, a handful of technology investors took interest. With time, however, this number grew but less substantially.
The Reserve Bank of India worsened the situation by warning about dealing with this virtual money in 2013, heightening citizens' fear. In 2017 though, the whole world witnessed these assets experiencing a massive price spike with Bitcoin at the forefront.
This move led to increased interest in the crypto market. The rising ideology was again halted in 2018 by the RBI, which issued a circulatory preventing financial institutions from dealing in cryptos. The crypto community fought back, and the supreme court lifted the ban in 2020. Despite this move being followed by regulation, it increased crypto activity in India.
Sectors That Use Crypto in India
The integration of cryptos has also influenced the growth of these currencies in various niches. Let's review some of the places where this virtual money is used.
Financial Services
Because several Indians don't have access to traditional banking services, cryptos provide a decent solution. These currencies offer an optimized way of transacting, facilitating faster transaction times and reduced transaction costs. Additionally, they are also embraced in cross-border transactions.
Entertainment
The entertainment industry comprises several variants, from movies to music and gaming. In gaming, particularly, cryptos have had a significant effect, for instance, through Non-fungible tokens (NFTs). These are virtual assets representing in-game characters that can be traded. Cryptos have boosted the online gaming niche as well. Various games like esports and online casinos allow cryptos allowing you to play your poker or slots with ease. If you are a poker fan, you can find more information on playing poker using crypto on top crypto poker sites.
The Current Indian Crypto Market
Having a sizeable tech-savvy population, India is engaging in more crypto-related activity. Since lifting the ban after the Supreme Court deemed it unconstitutional, the market experienced rapid growth and was valued at US$150.214 million in 2020.
The market continues to grow with various companies in the niche, such as TCS's Quartz Solution for Crypto and WazirX, a Mumbai-named cryptocurrency exchanger. According to a report by Statista, the revenue is set to hit US$222.70m by the end of 2023.
The market continues to thrive despite certain limiting factors, like the tax rate on cryptos. India imposes a 30% tax on crypto gains and an additional 1% deduction for each transaction. Such measures limit the full capability of the market.
Factors Contributing to the Growth of Crypto
Several contributors propagate the use of crypto in India and promote wider adoption. Let's look at some of these factors.
Youthful Population and Tech Enthusiasts
India displays a demographic characterized by young innovative minds . This element contributes significantly to how receptive they will be to these emerging trends in the financial system. They are more open-minded and will better utilize these inventions.
Lifting of RBI Banking Ban
Thanks to the trading community's revolt, India got a piece of the action after the ban preventing crypto trading was lifted. This move paved the way for a new way of transacting through these digital assets instead of relying on traditional banking methods.
Increased Awareness and Media Coverage
Cryptos gained massive attention globally after the Bitcoin price upsurged. This news traveled far and wide, attracting investors looking to make quick money globally. Increased discussions and forums on the subject sparked in India, creating awareness about this innovation.
Crypto Exchanges and Trading Platforms
After the ban, India experienced an increase in crypto firms. Combined with the global exchange platforms, Indians can now trade these assets easily. Furthermore, some of these sites offer more information on the assets expanding users' knowledge of cryptos.
Investment Opportunity
Cryptocurrencies have proven themselves to be investment opportunities with high returns. Investors, therefore, take a significant interest in the sector, and with the increased knowledge, most of the population follows. This increased investment activity contributes to the growth of the industry.
Conclusion
Cryptocurrencies are gaining wide attention globally and can't be overlooked. In India, despite the numerous measures to limit the use of this virtual currency, cryptos have found their way into the economy. This realization is a by-product of factors such as the young innovative population, increased investor interest, and lifting of the ban imposed by the RBI.
Disclaimer: The above is a contributor post, the views expressed are those of the contributor and do not represent the stand and views of Outlook Editorial.
