The trading volume of cryptocurrency in India has increased by 400 percent in the last few months during the nationwide lockdown due to the COVID-19 pandemic.
The boom in crypto trading is also said to have increased after the Supreme Court (SC) had lifted its ban earlier in 2020. Several new players and even retail investors have entered the cryptocurrency trading market within the last four months, according to a report by The Hindu.
“Along with the lifting of the restrictions on trading, the lockdown has also pushed people to stay at home and many people are spending more time on their desktops and many of them are trading more. Trading volumes are quite robust. Daily crypto trading volume in India maybe USD10-USD30 million,” Ajeet Khurana, the former head of the Blockchain and Cryptocurrency Committee of the Internet and Mobile Association of India (IAMAI) and former CEO of Zebpay, said.
He also said that the numbers had become significant enough for this to become a valid asset class and commercial activity.
“The regulators can no longer look away and fundamental issues like classification, taxation, need to be addressed,” Khurana added.
More entrepreneurs are expected to get onboard the trading wagon. Nischal Shetty, Founder and CEO, WazirX, said that the company had seen a three to four times increase in sign-ups. He credits the lockdown as a significant factor for the rise in volumes.
“The lockdown has been a major factor. People have more time to understand and learn new things. Also, a lot of people are looking for new avenues of making money online, as they don’t have a job right now or their jobs are offline and they can’t go to work,” Shetty said.
However, a lack of clarity on regulations and reports of a possible law to ban cryptocurrency remain a concern. The government had, last year, recommended cryptocurrencies in India, citing risks and volatility in prices.
While the SC allowed banks to provide services for virtual currencies, the Centre has not been able to figure out how to regulate this segment despite several committees coming up with proposals, including two draft bills.
Shetty said the Internet and Mobile Association of India (IAMAI) is working on a code of conduct for cryptocurrencies.
“We, as part of IAMAI, are trying to come out with regulatory pointers. Guidelines such as those on KYC will address concerns on money laundering and illegal activity,” he said.