Are Cryptocurrencies Still Relevant in India?

With Zebpay, India’s largest cryptocurrency exchange shutting down its business, does cryptocurrency have a future in India?  

This September, one of the India’s largest bitcoin and cryptocurrency exchange, Zebpay announced its shut down citing the reason—curb on bank accounts had crippled their ability to transact business meaningfully. According to April 2018 mandate, the Reserve Bank of India (RBI) and agencies under it such as several banks and NBFCs were refrained from getting involved in businesses dealing with cryptocurrency. Therefore, resulting in the sufferage of most cryptocurrency, and few even chose to shut down. “That stopped exchanges from receiving banking support, which also created a market perception that cryptocurrencies are not legal,” said Santhosh Palavesh, Chief Innovation Officer, Belfrics Group.

Let’s take a look at what went wrong for these cryptocurrencies in the Indian market. But before that, it is important to know what is a cryptocurrency. To begin with, Cryptocurrencies are virtual or digital currencies, which are used for electronic transactions, with the aid of encryption techniques to regulate the generation of currency units and verify the transfer of funds. They operate independently of a central bank. One just needs to register on a cryptocurrency exchange platform and provide details such as mobile number, name, bank details and pan card details. Once verified, you are good to go with transactions. Apparently cryptocurrencies knows no region. So globally there are over 2500 types of cryptocurrencies. Bitcoin and Ethereum being the major players in the market.

 Lack of proper framework:

Now, since India is yet to formulate any kind of rule and regulations pertaining to cryptocurrencies, they self-regulate themselves by ensuring there is a KYC compliance.  Nischal Shetty, CEO and Founder of Indian cryptocurrency exchange Wazirx said, “We are hopeful of seeing regulations come into crypto in India sooner than later so that as a country, we can be part of this digital revolution that's taking over the world.”

Moving towards a brighter future:

However, some industry experts believe that the future of the world would be crypto based. Palavesh is hopeful when he says, “We are looking at a world, where paper currency will be replaced by cryptocurrency and national currencies will be in the form of crypto, which shall not happen without regulations. India is just getting started with cryptocurrencies, and over time we will see more and more Indians getting involved in it. This is just the beginning.” concludes Shetty.