Cryptocurrency exchanges thrive in India despite vague regulations

It's hard to miss the constant relay of advertisements on television these days by various cryptocurrency platforms such as CoinSwitch Kuber and WazirX. And while there are grey areas regarding its regulation and legality, millennials are increasingly warming up to the idea of exploring this asset class as a solid investment avenue.

Growth of cryptocurrency exchanges

In 2018, the Reserve Bank of India (RBI) issued an advisory against trading and facilitating transactions of such virtual currency by any entity. This was struck down by the apex court in 2020, which was seen as a positive move towards cryptocurrency acceptance in India. This comes in light of the booming popularity of various cryptocurrency exchanges in India like WazirX, which has a monthly trade volume of almost Rs 170 crore. CoinSwitch Kuber, another major cryptocurrency platform is currently valued at about $500 million, having recently raised a round of funding from optimistic investors. In fact, currently, Indians hold cryptocurrencies to the value of Rs 10,000 crore. As such, imposing a blanket ban on the asset class has been contested by a majority of industry experts.

Popularity of cryptocurrency

Prominent cryptocurrency platforms like CoinSwitch Kuber allow you to start trading with just Rs 100. And despite the fact that it has been referred to as a Ponzi scheme on multiple occasions by the government, Rakshit Lodha, who works as an associate product manager with INDmoney, believes bitcoins and ethers can be the next big revolution in the financial world. He is not alone, given the fact that India provides one of the highest volumes of bitcoin and digital asset transactions in the world, outperforming countries like China.

Karan Anand, an avid crypto investor, calls for regulating the presently vague cryptocurrency space in India. Trading in cryptocurrency is easy and seamless, he says, with endless positive possibilities for the industry once proper regulations are in place.

Legal Hostility

But in what can possibly be a  major blow to these investors, the government is planning to propose a law that completely prohibits the possession and trading of cryptocurrency in the country. It is due to this lack of clarity that ICICI Bank also has shut off its cryptocurrency operations in the country. If the ban is imposed, India will be one of the first major economies to ban cryptocurrency. While countries like South Korea have legalised cryptocurrency, many Indian crypto investors are hoping for a positive turnaround and dialogue on devising policies around the burgeoning asset class and laying clear guidelines for regulating this space.