One of the most concerning developments in the global crypto sector was taking place in India over the past few weeks, where there were strong signs that the government was looking to introduce a law that would ban cryptocurrency trading and ownership in the country. This would have been a big blow to the growth of the crypto sector, since India had fast become a key market, and there were a lot of calls for this decision to be reconsidered. Thankfully, it has now emerged that the government has, in fact, decided not to impose a blanket ban, which will come as welcome news to crypto enthusiasts and business owners all over the country.
This is expected to have major positive consequences for the Indian economy, given the way in which crypto was embraced in the country last year following the lifting of a ban placed by the central bank back in 2018. It is not just trading that will receive a boost – cryptocurrencies are also being used in a number of ways in other sectors, with the underlying blockchain having the potential to improve the operations and prospects of many businesses. One such example can be seen in the online gambling sector. Here, many online casino operators have begun using blockchain to support their websites, while also offering users the option of placing bets via cryptocurrencies. It is no surprise that the likes of the online casino in India have been doing extremely well as a result, as people prefer such websites due to the convenience, privacy, speed and security that blockchain offers. Thus, the crypto sector in the country will continue to have the space to innovate and improve through this decision.
According to Nirmala Sitharaman, India’s finance minister, the government is trying to ensure that there is “a window available for all types of experiments in the crypto world.” This is a welcome change in stance and signals that not only will crypto be allowed, but the government will also support research and new ventures in this space. This is expected to allow innovation in crypto in India, and several leaders in the crypto space have already come out to celebrate this decision, urging their colleagues and other Indians to take this as a positive sign and begin innovating to stay ahead of the rest of the world.
The reasons for this apparent climbdown from the government are a sustained period of lobbying by the crypto industry, urging the government to provide clear regulations, rather than a complete ban. This call seems to have been heeded, as the government is apparently working on a comprehensive set of regulations for the industry. With the global crypto sector seeing large mainstream and institutional entities, such as PayPal, Tesla and banks such as JPMorgan and Morgan Stanley moving to adopt crypto, it was imperative that the same environment for investment and growth was provided to the Indian sector as well. Crypto has already gone past $1.5 trillion in market capitalization, and is poised for 10x-15x growth in the next decade or so – this is stupendous growth, and India can be a part of this with the right regulatory structure in place.
This is also in line with the government’s stated aim of taking India digital and increasing online transactions, as well as increasing the number of Indian companies and entities which can make a mark on the global stage. Adopting crypto and providing the industry with the tools to grow is one of the best ways to do this, and we shall now see the impact that this will have on the industry over the coming months and years.