Cryptocurrency!!! Now how’s that a term for the newly but quickly growing type of currency. Well, it’s a very famous term now & every investor is keen on investing in cryptocurrency. But wait, are you getting me wrong? No guys this is not a physical type of currency but a virtual one. Then you guys might be thinking how come this virtual currency is having such a fan following. So, let us start from scratch!

As we all know, there was no such thing as “currency” during the stone age era but later on humans began to develop themselves & came up with barter system in which they would just exchange stuffs as a medium of currency. Further the humans came up with modes of currency like bronze & copper coins, gold coins, silver coins & presently stainless steel, alloy metals & paper currency. So where does cryptocurrency stand? Yes, it’s the future of currency & one day whole world would be dealing in cryptocurrency as per modern leaders. After-all, currency is like God & it will exist as long as people believe in it & we all know people will never stop believing in God so the same applies for currency!!!

So, first of all what’s cryptocurrency? Cryptocurrency is basically a medium of exchange, not a real-world cash, but yes can be used to perform real world or virtual transactions. It involves use of strong cryptography to secure transaction records, to control the creation of additional coins & to verify the transfer of coin ownership. Some common examples of cryptocurrency are Bitcoin, Ethereum, Cardano, Dogecoin, etc.  Now, most of the developed countries have accepted the use of cryptocurrency. But, what about India? Is it legal to buy & sell cryptocurrency in India & if its legal how is its growth in India as well as what’s the future of cryptocurrency in India? So, let us have a look at all these questions today here. 

Cryptocurrency came in existence in 2008 with Bitcoin being the first mode of the same. Since then, many modes of currencies developed over years & the process is still going on. Slowly & Steadily as the value of Bitcoin started increasing, more countries legalized its use & thus by 2021 most of the developed countries have accepted cryptocurrency as one of the modes of transactions. But In India it took some time to even have its identity, let alone being used as a mode of transaction. Even today there are some issues with cryptocurrency in India & its not completely legalized to use everywhere in the country.

It’s a fact that till 2019, cryptocurrency was quite unfamiliar in the country & only by start of Jan 2020 it slowly began to have its impression in the Indian economy. But yes, since past one year, cryptocurrency has achieved new heights in India with growth rate being more than 500%.  In a study it was found that where there were only around 50 new users per day prior Jan 2020, now the current scenario has taken a complete U-turn with at-least 1200 new users dealing in cryptocurrency every day.

Bitcoin has had a huge role in increasing the growth of cryptocurrency in India. Actually, the stance is that if you guys remember, our honorable Prime minister Narendra Modi in Nov 2016 came up with the demonetization policy which as a result sent the shockwaves among the people of the country. Now, the people who had large amount of cash holdings were worried that how they would deal with taxes when they would hold the same amount in a different manner. This problem brought the attention of people towards Bitcoin & other cryptocurrencies. People found out a solution by buying large quantities of these cryptocurrencies & later sell them. What this actually do good for people is that it saved a considerable amount of time, effort as well as taxes which they would have to concur because of such large circulation of cash through the Indian banking system. 

So, this was the pick-up point of Cryptocurrency in India albeit in a small contribution. But since then, the prices of different modes of cryptocurrency, specially, Bitcoin have been on a continuous rise due to involvement of Indian market in the cryptocurrency market.

But as in movies, Cryptocurrency too had its share of bad luck in the Indian market. Actually, Reserve Bank of India (RBI) in 2018 imposed a ban on use of the cryptocurrency in the country citing reasons of dealing with heavy risks in transacting with cryptocurrency. Finally, in 2020 this ban was lifted by Supreme country of India with Indian residents welcoming this decision. But, till date RBI continuously warns its citizens of the risks involved with use of cryptocurrency & only deal in it by taking precautionary measures.

Current scenario is that the level of prices of cryptocurrencies has been on a continuous rise in Indian market with market rates of 5 to 10 % relatively higher than the global average reflecting the same. But still the point to note is that in-spite of 1.3 Billion population of our country it only contributes 3-4% of the global cryptocurrency market.

So, let us hope that more people come up with knowledge of the cryptocurrency in our country & start investing albeit with precautionary measures & secure their future with good returns.

Lastly, I would like to end with a famous quote “Cryptocurrency is absolutely here to stay & if you can’t see that at this point, it’s time to learn more about it.” well spoken by Joel Mcleod Sir.

Manish Budhwani
MMS
2020-22