With cryptocurrency making its presence felt with over $2.3 trillion market capitalization as of today, it is high time for India to adopt it, or miss the opportunity to foster financial inclusion
World’s second most populist nation with over 1.36 billion after China, India has been experimenting with new technologies for a few years now.
Artificial intelligence, machine learning, fintech are some which are already under pipeline as many startups, and government agencies are working on it already.
However, blockchain technology is new and with cryptocurrency a byproduct of blockchain making news across the globe, the Indian government has been studying it for a few months now on how to bring it under its policy.
Crypto pegged to a technology with no central control has been its major drawback, as the government is yet to decide whether to adopt it or impose a permanent ban.
Policy & Concerns
The Reserve Bank of India (RBI) has made it very clear that they are in favor of banning cryptocurrency or virtual currency, but the Indian Finance Ministry is yet to make its decision public, which is expected to be clear, when they put the Cryptocurrency and Regulation of Official Digital Currency Bill for vote next month.
The price fluctuation, usage of crypto for money laundering, terrorism and other illegal activities, is also a concern for the government, as it cannot be traced.
There are some projects like increasing bank accounts, providing subsidies to citizens, providing free health services, documents verifications of the central government that can benefit, if blockchain based crypto technology is adopted.
Even the state governments can jump in to adopt this. There are some states like Telangana, Goa, Tamil Nadu, Maharashtra that have already started experimenting with blockchain technology, but whether they move towards crypto is not clear. The states have no mandate to decide adoption of crypto, only the central government can do it.
Taking this forward, the central government can use crypto to reach out to masses. As a sign, RBI is working on launching its own rupee based stable coin which is expected to be launched by December 2021.
With a population of over 1.36 billion, India is poised to gain immensely by crypto adoption.
As per an estimate, overall mobile phone penetration is at a whopping 1.21 billion plus as on March 2021 and with penetration of smartphones is around 844 millions, the market is huge for any country to sit on it and do nothing.
With global developments happening in the crypto sector in making lives better for citizens, India cannot miss the bus. India, which has the capacity to control the global crypto manpower, is also a leader in information technology. Every nation is eying the Indian workforce as they believe that crypto is a next disruptor for all the industry.
Be it supply chain; real estate; asset management; agriculture; banking, insurance & financial sector; science; information technology and others, name any industry crypto can do justice.
Banking the unbanked
The Banking, Insurance and Finance sector is a very important sector, where crypto can bring a sea change.
With over 420 million bank accounts, there are millions still without bank accounts, which need to be catered to with banking & finance facilities.
This can be possible as there are over 844 million smartphone users. These users can be brought under a crypto umbrella.
With a mere 15 million people buying & selling crypto in India with an exposure of $6.6 billion today, there is a huge market to tap and India can be a leader in crypto adoption globally.
A recent survey conducted in 154 countries by cryptocurrency research consulting firm, Chainalysis, found India at the second position globally in the cryptocurrency adoption.
To move forward, India can start with the banking sector for crypto adoption, and later on other industries can be included. Government needs to bring a clear policy that does not create any roadblocks in further developments of the crypto sector. On the other hand, crypto exchanges need to check the concerns of the government and self regulations can be the first step towards it.