Cryptocurrency is now in a regulatory gray area in India, with no clear status either way. There has been a holdup in the passing of a comprehensive Crypto Law, which had been anticipated for the near future. Notwithstanding periodic pronouncements from the Honorable Finance Minister, the RBI, as well as other government authorities, we are still waiting for an official position or adequate rules on the matter. Some investors and Cryptocurrency users have been discouraged by new tax regulations introduced earlier this year. Notwithstanding the legislative gray area, the tax laws, as well as the price fluctuations, Cryptocurrency use has been rising steadily. It would seem that Indians have fully accepted the idea that Cryptocurrency is the tomorrow.
KuCoin, a worldwide Cryptocurrency exchange, has revealed that despite the government’s Crypto-antagonistic stance, an estimated 115 million Indians have invested in Cryptocurrencies with the expectation of long-term gains. Fifteen percent of India’s working-age population, or 115 million people, have invested in Cryptocurrencies. More than half (54%) of Indian Cryptocurrency speculators are bullish on the industry’s long-term potential.
It is likely that cryptocurrency will go mainstream in India as the number of investors increase because of 7 important reasons:
1. Increase Customer Awareness
Individuals now have a better understanding of what Bitcoin as well as Cryptocurrencies are than they did in the past. Until now, most folks considered Cryptocurrencies a passing trend or a scam designed to help you become wealthy quickly, and they were generally confused by all the buzz around them. Influencers, Crypto-centric businesses, and others in the sector have worked tirelessly to educate the public about Cryptocurrency as well as its prospects throughout the years. The government’s reversal of the RBI’s prohibition on Cryptocurrencies has also inspired hope that the government may eventually regulate and tax Cryptocurrencies rather than completely ban them.
2. Ease of Use for Novices
Clients, particularly those who are just starting out, now have a lot easier time getting started with Bitcoin and other Cryptocurrencies, since the process of using, purchasing, earning, and trading has been made much simpler owing to the creative firms that are operating in this field.
3. Shifting of Bitcoin from Gold
Indian culture has a long-standing love affair with the precious metal gold. Gold has historically been used as a means of saving by individuals and families, and not merely as a decorative accessory. Young Indians fluent in the electronic time period are hastening the transition from gold to “Digital Gold,” also known as Bitcoin, since they see that the latter has certain similarities with the former but is much better in other aspects.
4. Cryptocurrency as Investment Portfolio
Cryptocurrency’s meteoric rise in popularity over the last several years has led some to see it as a potential investment hedge independent of traditional financial markets. Experts recommend allocating a modest percentage of their customers’ portfolios to Cryptocurrency.
5. Price Crash
Since the value of the digital currency Bitcoin and other Cryptocurrencies has fallen from its record highs at the end of last year, many investors who were on the fence or hadn’t yet made significant investments are buying up Bitcoin as well as other Cryptocurrencies.
6. Financial Institutions and Other Players Getting into Crypto
One of the most exciting parts of the growing Crypto acceptance has been the manner in which organizations, large corporates, enterprises, and even governments or like El Salvador are getting involved, comprehending, and putting enormous sums of money into Cryptocurrency.
7. Cryptocurrency Remittances
Non-resident Indians (NRIs) from all over the world are increasingly turning to Cryptocurrencies like Bitcoin and Ethereum for remittances because they have realized that doing so allows them to steer clear of the steep fees associated with international money transfers and that the process as a whole is both quicker as well as more effective.
Barriers of Cryptocurrency Acceptance
The positive or negative outlook for Cryptocurrency acceptance in India is determined by a wide range of variables. Many problems, including a lack of public understanding of Cryptocurrency and the limitations imposed by regulators, continue to dampen the enthusiasm of current and potential investors. Fourteen percent of respondents said they didn’t know which Cryptocurrency to participate in, whereas twenty-one percent said they didn’t understand how Cryptos work. Although the study had its limitations, it did provide some insight on the development and popularity in Cryptocurrency in India as a whole.
The Bottomline
Bringing greater visibility as well as solving the regulatory uncertainties and modifying tax regulations which are unfavorable to stakeholders would go a long way toward bolstering the growing Cryptocurrency usage in India. I’m holding out hope that the nation’s proposed Cryptocurrency Law would be capable of addressing those problems as well as encouraging wider use of Cryptocurrencies.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.
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