Amid a massive crypto bull run that saw the price of Bitcoin increasing by over 400 percent within a year, cryptocurrency transactions in India soared by 30 percent since March 2020, Business Line reports.
Bitcoin (BTC), Ripple (XRP), Tether (USDT), and Tron (TRX) lead the list of the most popular digital assets in India.
Increased India’s crypto adoption
ZebPay chief marketing officer Vikram Rangala cites several factors that drive the surging volume of crypto transactions. He told Business Line that Indians are open to new investment vehicles and go with global trends. The younger generations, who experienced the 2008 financial crisis and are skeptical of the economic status quo, also explore alternative ways to store wealth.
“The crypto industry in India is trying to create a new asset class for investments, and also a new software for various kinds of applications built on the blockchain. Bitcoin was under $5,000 and ETH around $100 when the lockdown started, and now, since a year of the lockdown, they have gone up by 10 times,” says Rangala.
ZebPay, India’s oldest cryptocurrency exchange, has about 4 million customers. Additionally, the platform expects to process $2 billion worth of trades per month as demand for crypto-assets explodes, Bloomberg reports.
Sumit Gupta, CEO and co-founder of crypto exchange CoinDCX, says lockdown measures to prevent the spread of the COVID pandemic have helped boost crypto adoption in the country, but interest in crypto saw sustained enthusiasm and even growth.
“Retail investors are growing increasingly aware of the asset’s potential owing to its deflationary nature and making it a better hedge against market shocks,” says Gupta.
Uncertain future for the crypto industry
Despite India’s growing interest in cryptocurrencies, the future of crypto trading in the country remains uncertain. The central bank has raised concern that digital assets may affect Asia’s third-largest economy’s financial stability, a view that some speculate could lead to stricter crypto regulations.
In 2018, the Reserve Bank of India banned banks and other financial institutions from supporting crypto transactions after fraudsters used digital assets to commit illegal activities. In April 2020, The Supreme Court lifted the ban in response to a petition by crypto exchanges.