India’s crypto industry could be worth $2.3 billion globally by 2026, and can create 800,000 jobs, an economic value-add of $184 billion by 2030.
There is a global consensus that crypto must be regulated.
RBI is of the view that cryptocurrencies should be prohibited.
Effective legislation on this matter is possible only through international collaboration.
Prime minister Narendra Modi has held that “it is important that all democratic nations work together to ensure that cryptocurrency doesn’t end up in the wrong hands.”
Countries, companies, and international organisations have already begun to find concrete means of oversight of the space, both legal and technological.
Recently, RBI announced its decision to allow trade settlements between India and other countries in rupees.
The view that the majority of cryptocurrencies are dollar-denominated rises from the perception that usually the rupee is used to buy dollars, which, in turn, is used to procure the stablecoin Tether (USDT), which aids the purchase of cryptocurrencies.
However, if the rupee trade settlements route is explored and expanded to cryptocurrency trading operations, the dollarisation concerns can subside.
Many countries, including India, China, and the US, are exploring the option of having a Central Bank Digital Currency (CBDC).
An important success factor of a CBDC is the cooperation between the public and private sectors, with the private sector participating in developing, testing, and deploying a CBDC.
With the emergence of Web3, the Metaverse, and the large-scale adoption of cryptocurrency platforms like Ethereum and Polygon by global brands, more Web3 interactions are expected to take place using the native cryptocurrency tokens of these platforms, and CBDCs can become the gateway for Indians into Web3.
The lack of regulatory clarity, an onerous taxation route, and the scrutiny on the cryptocurrency sector in the recent past has pushed more than 300 startups in the space to move out of India.