According to Indian crypto trading and exchange platform Unocoin, cryptocurrency is a digital asset based on the network distributed across a large number of computers and is secured by cryptography.According to Indian crypto trading and exchange platform Unocoin, cryptocurrency is a digital asset based on the network distributed across a large number of computers and is secured by cryptography.

By Kunal Doley

Amid the cryptocurrency craze sweeping the country, Bollywood megastar Salman Khan has become the latest celebrity to join the virtual or digital currency bandwagon. He recently unveiled GARI, which is said to be India’s first crypto token launched by micro-content, short video application Chingari.

A “fungible blockchain token”, GARI will serve both “as a future in-app currency and a governance token”, as per the company.

Salman Khan’s endorsement comes close on the heels of legendary actor Amitabh Bachchan also hopping into the crypto space. Bachchan, who is now the brand ambassador of Indian cryptocurrency exchange CoinDCX, will be working to increase awareness around cryptocurrency and popularise it as an emerging asset class, the company said in a statement recently.

The involvement of the two superstars, along with a host of other national and international celebrities, makes sense as cryptocurrency has seen an exponential rise in interest in India, especially since the Supreme Court in March last year quashed the ban that the Reserve Bank of India (RBI) had imposed on trading in cryptocurrencies like Bitcoin in April 2018.

Despite the volatility of prices and the legal ambiguity surrounding it, India has the highest number of cryptocurrency owners in the world at 10.07 crore, as per BrokerChooser, a broker discovery and comparisioin platform. Also, blockchain data platform Chainalysis recently placed India in the second position in terms of global cryptocurrency adoption.

Rise of digital currency

Earlier this month, cryptocurrency exchange CoinSwitch Kuber became India’s second crypto unicorn and the most valuable at $1.9 billion valuation with the latest investment round of over $260 million, as announced by the company. In August this year, another crypto exchange CoinDCX had announced a $1.1 billion valuation with its Series C round of $90 million.

CoinSwitch Kuber said it raised its Series C round from Andreessen Horowitz (a16z), Coinbase Ventures and existing investors including Paradigm, Ribbit Capital, Sequoia Capital India, and Tiger Global. The startup said it achieved unicorn status in “just 14 months of operations in the country”.

Evidently, the space holds immense promise. As per latest industry reports by Allied Market Research, the global cryptocurrency market was valued at $1.49 billion in 2020, and is projected to reach $4.94 billion by 2030, growing at a CAGR of 12.8% from 2021 to 2030.

Amid the Covid-19 pandemic, there has been a significant insurgence in the crypto market, especially in India. According to NASSCOM’s recent report, the Indian cryptocurrency market has been growing exponentially over the last few years and is expected to reach up to $241 million by 2030 in India and $2.3 billion by 2026 globally. “This can be attributed to people looking for alternative sources of investment, growing Internet penetration and people losing faith in the traditional financial ecosystem. People are now perceiving cryptocurrency as both ‘digital currency’ as well as ‘an alternative to traditional investment mediums’,” says Tarusha Mittal, COO and co-founder of OroPocket, a New Delhi-based fintech solution that tokenises real-world assets such as gold, silver, and other precious metals.

Pandemic push

The Covid-19 pandemic has disrupted the world as we know it but has caused a revolution in the technology sector. In the face of this sudden obstacle, our traditional technologies needed to improve, and this opened opportunities for new relevant technologies to take the centre stage, says Aniket Jindal, co-founder of Biconomy, an Indian blockchain transaction platform. It empowers blockchain developers to enable a simplified transaction and onboarding experience for their Web3 project.

“The blockchain and crypto sectors boomed during this time as they provided an alternative that was modern, independent, and decentralised. We have seen a rise in adoption of digital and mobile-based applications—from commerce to payments. And crypto has been no different,” adds Jindal.

Through Covid-19, with everything moving towards a virtual space, the appreciation for anything digital (including digital assets) went through the roof, says Prashanth Swaminathan, partner and head—institutional business, Woodstock Fund, a multi-asset emerging technology fund house currently focused on investments in blockchain and distributed ledger technology (DLT).

“As people had more time on their hands and they were getting used to the new normal, they started appreciating digital assets for their uniqueness and the role they could play in building a new Internet. More people started attending online webinars, reading articles and blogs (mind, digital assets are not taught in books), and playing with various products on offer in the digital world—from lending and borrowing digital assets, to buying virtual real estate in the metaverse,” Swaminathan adds.

Festive fervour

Amid all the noise, cryptocurrency is emerging as preferred investment class, especially among the millennials. In the run-up to Diwali, some people have even labelled virtual currency like Bitcoin as the new gold or digital gold.

“Both Bitcoin and gold are seen as a hedge to protect fiat portfolio due to their inflation-beating properties. Bitcoin is labeled as digital gold by many and is also seen as more superior to gold in several respects. It offers a high degree of accessibility, allowing anyone to send and receive Bitcoin in a permissionless way,” says Rajagopal Menon, vice president of WazirX, a Mumbai-headquartered Bitcoin and cryptocurrency exchange and trading platform.

“For sure, bitcoin is the new gold in terms of investment not only in India but also everywhere in the world. It has become the best store of value and the best investment vehicle too. As the festive season is around the corner and with the market hitting the new highs, there is a rush to the market,” adds Sathvik Vishwanath, co-founder and CEO of Bengaluru-headquartered Unocoin.

Almost every sector of the economy sees a rise in activity during the festive season and in the run-up to Diwali. However, crypto replacing gold seems like a bit of a stretch at the current moment, says Ashish Anand, founder and CEO of, a decentralised finance (DeFi) lending platform that tokenises real-world assets.

“Although Bitcoin shares some of the same features with gold like limited supply, scarcity, censorship resistance and is rightly dubbed as ‘digital gold’, it may not replace gold as an investment option because of its volatility. Indians like to play it very safe when it comes to investment options and gold has lived up to this standard over centuries,” Anand adds.

As the Diwali season comes right after harvest season,’s blockchain fintech arm Whrrl is witnessing rising demand for commodity-backed loans from farmers. “We can say with pride that we are already bringing Diwali to the homes of unbanked farmers,” says Anand.

Absence of regulations

As of now, there is no legislative framework that governs cryptocurrency in India. In the past decade, India has generally held a cautious position towards use and transactions involving cryptocurrency.

In 2013, the RBI first issued a press release cautioning users and investors of virtual currencies and indicated that they were reviewing the legality of such assets under the prevailing regulatory frameworks. The first formal restriction on the use and transaction involving cryptocurrencies was affected by a circular issued by the apex bank in 2018. The circular specifically barred banks and other financial institutions from dealing with cryptocurrency-based platforms and any form of virtual currencies.

However, the RBI circular was set aside by the Supreme Court in March last year set. This reflects the concern that extant laws are inadequate to deal with the proliferation of private cryptocurrencies. A solid legal backing, therefore, could go a long way in removing any ambivalence over the issue.

Cryptocurrencies typically operate independently of a central bank. These are essentially digital currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds.

In 2019, an inter-ministerial committee under then economic affairs secretary Subhash Garg had suggested that private cryptocurrencies like Bitcoin be banned, and any activities related to virtual currencies be criminalised.

Even the central bank had through public notices in December 2013, February and December 2017, warned holders and traders of virtual currencies about risks associated in dealing with such currencies.

The authorities’ discomfit with Bitcoin stem from the fact that it doesn’t derive its value from any underlying assets or earnings. Since its value depends purely on what an investor is willing to pay for it, it can be easily swayed with speculative bids. Moreover, such currencies typically keep the owners’ identity anonymous, making it difficult to track its flow. This can cause security risks and the currencies can be used to funnel black money.

However, things are about to change now. As part of the Internet and Mobile Association of India (IAMAI), WazirX is working on a code of conduct for cryptocurrency companies in India. “We have a draft version ready and are working on updating the guidelines in line with the technology changes that have happened in the last few years. The code of conduct lays out a guideline for KYC/AML and other regulatory-related features. This helps curb the illegal activities as well as scams,” says Rajagopal Menon of WazirX.

“Besides, on multiple occasions, our finance minister has also mentioned that India is going to take a calibrated view on crypto. Overall, it is a very good sign for the Indian crypto ecosystem. Around the world, the crypto adoption is picking up. Governments and tech giants around the globe are embracing crypto, and I’m confident that India will not stay behind,” Menon adds.

Future perfect?

India is on track to become a digital asset superpower, with retail investors increasingly interested in investing in digital assets. “The interest shown by Indian investors in alternative investments and asset classes leads us to believe that the country’s retail investors are prepared for the rapid adoption of cryptocurrency as an emerging asset class,” says Mittal of OroPocket.

So, how should one go about investing in cryptocurrency? Mittal of OroPocket advises that you should always do your own research (DYOR) before investing in crypto, like you would with any other asset class. Follow the makers who are solving real problems, take in a lot of information but think for yourself, as well—nobody can decide your risk appetite. Analyse your risk appetite and invest accordingly—decide and invest,” says Mittal. Having said that, it is good to start small, but be consistent, Mittal adds.

The most important thing first-time investors should bear in mind is that crypto is a high-risk, high-reward investment option, offers Menon of WazirX. “You should invest based on your risk appetite. While investing in bitcoin and other cryptocurrencies, please be mindful about the product you use. I’d strongly recommend using legitimate exchanges that follow KYC and AML guidelines. Like any other industry, it’s important to beware of get-rich-quick scams or people who promise to double the invested amount, among others, he adds.

What exactly is cryptocurrency?

According to Indian crypto trading and exchange platform Unocoin, cryptocurrency is a digital asset based on the network distributed across a large number of computers and is secured by cryptography. “This makes it nearly impossible to counterfeit or double-spend. It is decentralised and distributed, facilitating peer-to-peer transaction of digital assets without the need for intermediaries,” said Sathvik Vishwanath of Unocoin.

Crypto is an alternative asset class, says Rajagopal Menon of WazirX. “It’s also the fuel required to run blockchains. Crypto like Bitcoin and Ether are needed to run smart contract and write to the distributed ledger that they are built on top of. Over the past few years, crypto has been gaining momentum around the world. The fact that it is backed by an innovative technology that is decentralised in nature makes it very appealing. Slowly more and more institutions are coming out in its support, and that has also piqued retail interest in crypto,” he adds.

“Cryptocurrency is basically a virtual currency—transactions are recorded on blockchain, which makes them irrefutable and immutable. Think of blockchain as a public ledger,” further explains Tarusha Mittal, COO and co-founder of OroPocket, a New Delhi-based fintech solution that tokenises real-world assets such as gold, silver, and other precious metals.

There has been a lot of noise around cryptocurrency in the market since last year due to several factors. “Firstly, the halving of Bitcoin (Bitcoin market circle) happens once in four years and the most recent one took place in 2020. In every bitcoin halving, the mining reward is cut down to half and as well as the rate at which new coins are released to the circulation, thereby the price of each coin increased. Secondly, institutional investors showed more interest in this technology, and some started buying or recommending it. Thirdly, because of the huge growth of social media and Internet celebrities endorsing cryptocurrency, it is creating a contiguous narrative spreading all over the world,” Vishwanath of Unocoin adds.

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