Cryptocurrency has created lots of buzz for all wrong reasons for the last year. The cryptocurrency termed as virtual digital assets attracted investors willing to play in the high-risk domains. The unrecognized digital assets market cap zoomed past $2 Trillion before cooling down to $880 Billion after post number of reputation setbacks for one or another reason.
Many cryptocurrencies were launched by a number of players with attractive programs to attract potential investors and created a fury of investment in the sector and Indian investors played as an important stakeholders.
The unregulated digital assets are the talk of the street by Indian investors who invested heavily in Cryptocurrency and subsequently started impacting the closed environment Indian financial system. Indian investors got lured into quick earning probability and even took a financial loan to invest in digital assets.
The sudden fall of a few major companies due to loosely coupled processes implementation and monitoring created panic which led to the sectorial fall of the cryptocurrency. The fall of FTX acted as the last straw as institutional investors started pulling out their money even at a loss.
India’s Finance ministry’s action of bringing virtual digital assets under taxation made potential returns unattractive. In the Reserve Bank of India, the introduction of Central Bank Digital Currency with sovereign guarantee created lots of buzzes and may change the dynamic of the Indian Cross border payment industry. For India, the launch of CBDC is another form of saving as the country spends more than a billion dollars in printing local currency. India is also struggling to manage black money, drug money, and terrorism, and digitization of currency would help the country
The biggest critic of unregulated digital assets is the Reserve Bank of India, and they have the opinion of blocking any form of cryptocurrency, stablecoin, etc. to mitigate any risk to Indian citizens. The Indian government and attached regulatory bodies always advocated for a uniform regulatory framework globally and shall be presenting the framework during its G20 Presidency. More than 20 countries are working on their CBDC, and I can foresee a new way of international trade wherein countries will be executing in their digital currency.
Based on the very unpredictable regulatory environment, many Indian investors moved from India to other friendly countries on cryptocurrency. In my opinion, the probability of India recognizing cryptocurrency is near zero, technological exchanges can leverage their technological superiority to offer technology-based alternative services.
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