Cryptocurrency (Representative image: Reuters)
A recent NASSCOM report titled 'Crypto Industry in India', released in association with WazirX, noted the spectacular rise and popularity of cryptocurrency in India, particularly amongst the younger cohort. Per the report, more than 60% of states in India are emerging as crypto tech adopters, with the industry set to reach 241 million dollars by 2030 in India.
With 6.6 billion dollars worth of investments already made in crypto assets by Indian retail investors, the Indian market is at the cusp of exponential growth, expected to grow 2X faster, and has the potential to create more than 800,000 jobs by 2030, currently providing around 50,000 jobs in this space.
But against this optimistic background of a crypto boom in the country, the administrative annals of the country remain surprisingly reluctant, if not completely averse, to the idea of cryptocurrency adoption in the country. In a recent statement by FM Nirmala Seetharaman on the same, she said:
“Take El Salvador. The way in which they went ahead to accept it (Bitcoin) as a currency, you’d think common people don’t care about digital currency, but the public took to the streets against the move. It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone? El Salvador may be an exceptional place where they tried some experimentation. There are other countries that are talking about the central bank having a legitimate cryptocurrency. That could be a possibility”.
How does the government’s reticence on adopting crypto and blockchain fare amidst the rising crescendo of excitement and interest around the same in the younger masses of the country, developing a thriving industry that has massive economic potential?
Says Douglas Horn, Chief Architect of Telos Blockchain, “El Salvador’s response to Bitcoin may be more about the requirement to incorporate it rather than the actual use of Bitcoin. As more countries look to integrate crypto into their economies, they will hopefully give people longer transition periods before making its use mandatory.”
“India specifically has already weathered significant monetary upheavals in recent years, hence, it’s hard to assess whether this will make them more or less receptive to another change like adopting cryptocurrency. A phased-in approach with incentives would have been less onerous and given people the time to see Bitcoin in use and grow accustomed to it, which is likely to be more productive for other economies adopting crypto,” he elaborates.
But is a comparison with El Salvador relevant? It is one of the poorest countries in the western hemisphere, with low per capita income, inflation, and high unemployment. The nation's economy depends heavily on remittances from Salvadorans working abroad.
Explains Kumar Gaurav, Founder, and CEO, Cashaa: "Bitcoin is a perfect payment solution for international transfer, much better and efficient than any other solution for Salvadorans. For many countries including El Salvador in a similar situation using Bitcoin as a legal tender makes perfect sense, as its own currency has much higher volatility than Bitcoin”
Optimistic about Blockchain adoption
Blockchain technology is already seeing a positive response, with many state governments like Punjab, Karnataka, and more collaborating with various start-ups and developing projects on the blockchain networks.
Avinash Shekhar, Co-CEO of ZebPay, highlights this trend of rising blockchain adoption in government functioning. ”Blockchain and its scope are already being discussed in the country among policymakers, businesses, and entrepreneurs. There’s no doubt in the potential of the technology and we believe the government also recognises the importance of keeping a space for experimentation and innovation,” he said.
For instance, the Government of Maharashtra has been evaluating the applications of blockchain in matters of e-governance. In fact, the central government recently announced the deployment of a blockchain-enabled certificate verification platform to certify, provide startups with incentives, and facilitate budding entrepreneurs to gain access to the FoF for Startups, which is worth Rs 10,000 crore. Horn concurs. “India stands to gain huge benefits from blockchain’s many non-monetary uses. It could greatly improve the nation’s system of land ownership recording, which needs modernisation. An identity system like Estonia’s would be another huge benefit," he noted.