Union Budget 2022-23: Cryptocurrency will support India’s financial inclusion goals and also lower the cost and the speed of transactions all over the globe
India’s crypto market has been increasing over the last few years. According to a Nasscom report, it is expected to touch $241 million by 2030. With the current trends, more Indians and investors are expected to join the crypto revolution across all demographics. India is a country with diversified financial needs and having a cryptocurrency will promote the underlying benefits of this technology.
The Crypto world has immense headroom to grow, and as access to new innovative investment opportunities emerges, it is expected to see a massive inflow of capital in this ecosystem. The COVID-19 pandemic uncertainties have granted significant attention to cryptocurrency, bitcoin, blockchain in India and across the world. Many started seeing digital currency as the future of finance.
Gold, oil, and stocks were the major asset classes, but after the 2008 recession, the investors lost trust in these asset classes and Crypto appeared as a new trend. As far as the investors are concerned, a new type of ‘diversifiers’ has emerged in the last 18 months who are now increasing their exposure to new asset classes like cryptocurrencies. When Elon Musk, CEO of Tesla and SpaceX, announced that he had bought dogecoin for his newborn son with Canadian musician Grimes, Dogecoin cryptocurrency had skyrocketed its value as it soared up by 16 percent.
The perspective of day-to-day financial dealings is changing with a strong push for private currency to cryptocurrency. Cryptocurrency challenges this world of business and economy, forcing several governments to think about regulating the emerging world of a potential parallel economy. In a country like India, where the population is more aware of traditional financial institutions, crypto finance enables financial transactions, making Crypto an emerging adopter to India.
Cryptocurrency will support India’s financial inclusion goals and also lower the cost and the speed of transactions all over the globe. This will make the world less dependent on cash, and increase the mobility of money across the world. This sector has immense headroom to grow, and as access to new innovative investment opportunities emerges in Crypto, to see a massive inflow of capital in this ecosystem. Therefore, there is a need to create a framework for digital currency.
India being a tech-welcoming nation, it is pretty positive that the regulators will develop policies supporting Crypto in this session. Most importantly, it is essential for the RBI to take calculated steps to develop a systematic framework and safeguard the interests of the investors. There are more than 100 million crypto investors in India, a higher number than in any country in the world.
India is a country with diversified financial needs and having a cryptocurrency of our own will promote the underlying benefits of this technology. It is crucial for the bill to be approved by the government, and define the Crypto gains. Hence, the crypto industry will go unnoticed by the Finance Ministry. The government of India should recognize the economic reality of cryptocurrencies that will prevent the emergence of an anonymous parallel economy of black money by bringing cryptocurrency under the supervision and regulation of the RBI. The budget would need to take calculated steps in developing a systematic framework and make systematic regulatory changes to ensure the viability of a community that has been vital to the cause of financial inclusion.
The author is Co-Founder, Flint-crypto investment platform. Views are personal.