India is slowly positioning itself as a global cryptocurrency hub.
Recent reports show Indian nationals are investing in digital assets at a huge rate, with almost 8% of the population now owning cryptocurrency.
Since April last year, India’s investment in cryptocurrencies rocketed to more than $10bn from $923m, according to crypto research and intelligence business CREBACO.
The recent growth came amid a flurry of new products, such as systematic investment plans and exchange fixed deposit plans.
Some popular platforms in India such as CoinSwitch Kuber, CoinDCX, and BuyUCoin have also facilitated trading in cryptocurrencies.
Regulation in India is still a problem
However, like most other markets, cryptocurrencies in India are currently unregulated, and there is consensus among policymakers that it should be taxed.
In spite of looming regularity uncertainties, India’s predominately young population still sees huge potential for growth in the market.
Blockchain – the technology that underpins cryptocurrencies – is also hugely popular among national celebrities like Amitabh Bachchan or Salman Khan.
However, the biggest threat to cryptocurrency success in India is still the government which has often made noises about clamping down on digital assets.
Anirban Bhattacharyya – a partner at Shardul Amarchand Mangaldas – explained that, in the absence of formal regulation, cryptocurrencies were essentially seen as assets.
“From an Indian regulation perspective, it is as good as buying or selling any goods online,” he said.
“But these are assets that have a certain value that’s going up and down and there is trading happening. For all practical purposes, these are securities, except there are no bodies like SEBI or RBI treating them as such.”