It’s been two months since the Indian Supreme Court overturned the banking ban issued by the Reserve Bank of India to all entities regulated by the RBI from dealing with or settling cryptocurrencies. Despite the global markets landslide, the Indian cryptocurrency sector has seen unprecedented growth in interest and trading volumes with major global players investing in the Indian crypto and blockchain industry.
The RBI needs to take advantage of the momentum the industry is currently witnessing, to build out a forward-looking legal framework that allows cryptocurrency companies to operate and contribute to the broader economy. In an effort to provide Indian policymakers with some guidance on creating fintech regulation that fosters responsible innovation and protects consumers, San Francisco-based cryptocurrency and software firm Ripple published a policy paper outlining their recommendations for legalising and regulating cryptocurrencies in India.
Despite the current economic crisis, the cryptocurrency markets have thrived, proving the asset class to be a much better hedge against market turmoil compared to traditional commodities such as gold or oil. Since the global market downturn, there has been increased interest and active participation from Indian retail investors in crypto. Industry players within India have recognised the surge and are actively looking to educate the masses and encourage adoption.
For example, CoinDCX has pledged $1.3 Mn to an initiative called #TryCrypto to encourage cryptocurrency mass adoption. Additionally, CoinDCX is also launching a blockchain and crypto educational platform as part of this initiative. Global cryptocurrency exchange, Binance, has also proposed similar initiatives and activities. To encourage the safe use of cryptocurrencies, clearer regulations will help protect retail investors in this nascent asset class that has been helping investors protect their wealth.
To date, cryptocurrencies and the crypto asset class are the most lucrative and attractive products to derive from the blockchain. To ban cryptocurrencies or neglect regulations around the crypto asset class will mean that India is missing a critical part of the industry; we risk losing innovation, tax revenue, and talent to overseas markets. As we continue our focus on ‘atmanirbhar’, it behoves the Indian economy to develop clear regulations in order to protect investors while supporting innovation and increase optimism from foreign investors.