We have seen a lot of speculations in the Indian market on cryptocurrency after the Apex court gave its verdict in March 2020 favoring the crypto traders. As per the recent news, the Regulators have been working on preparing a note to pen down the proposal to the government. It is also very evident from the recent SC ruling that the court has been in favor of the crypto market considering its demand across the world.

In recent times, we have seen the volumes in crypto trading grow drastically in the pandemic which has proven the adaptability of the Indian market to this culture. Having said that, a blanket ban on the trading would be unlikely. However, many stake owners have been eyeing on the government for the way forward guidance. It has also been seen that India has been considered as a huge market in crypto considering its diversity and the young population, who are keen in the technology behind.

Businessman in blockchain cryptocurrency concept

The only reason which the Regulators might have been fearing is the reduction in the use of fiat currency, thereby leading to huge competition to Indian banks, where the banks are already struggling in the Indian markets to cope up with the NPAs and their accumulated losses. To keep the banking business running in its pace and to keep the parallel crypto market alive simultaneously could be the main challenge for the Government. Where most of the crypto markets across the globe have placed stringent regulations in place quite early, the Indian markets are struggling in this dilemma to regulate it to balance their economy between the fiat and crypto currency. Indian economy being one of the largest in the world, there need to be stringent policies in place to regulate such crypto markets but banning this would definitely not be advisable.

How is the world using crypto?

1. Cryptocurrencies are traded actively on crypto markets

2. The trades are not only in buying/ selling on the platform but these are also being arbitraged, leading to huge volumes

3. Strategies are being worked upon by active traders and many products are introduced to multiply the gains

4. Cryptocurrencies are accepted so much in routine in certain jurisdictions that the local regulators have set up ATM machines to exchange cryptocurrencies with fiat currencies

5. Cryptocurrencies are also accepted in many markets across globe as a consideration for normal sale i.e. groceries, restaurants, household items, etc.

6. Many more such ways in which cryptocurrencies are being used across the globe

While these markets have accepted these currencies, they have also clearly defined the rules and regulations. Almost all crypto platforms today operate with complete KYC of their customers and accounts are made active only after the KYC is confirmed, therefore the base level threat which the regulators earlier had to regarding unanimous transactions being taken place is addressed. Adapting this culture with proper regulations would basically increase confidence of the stake holders whereas working this way without any regulations would give an open hand to interpret and use this situation to their benefit by the stakeholders. Therefore, call needs to be taken by the Government at the earliest for streamlining this market.

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Company: Wadhwa & Shah, Chartered accountants
Location: Mumbai, Maharashtra, IN
Member Since: 14 Jul 2017 | Total Posts: 25
Qualified as a chartered accountant in 2011 and in practice since 2014 View Full Profile

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May 2021