WILL CRYPTOCURRENCY AFFECTS INDIAN MARKET?
Author: Ritik Agrawal, Siddhi Singh
IOL, Jiwaji University
INTRODUCTION
In this globalization modern period, people are moving forward to adopt a digitalization structure. From Departmental store to E-Mart, Library to E-Library, class to Online meeting platforms and so on, all this is possible only with the efficient and effective use of digitalization world.
Covid-19 showed the importance of digitalization as one way to increase resilience. Forming a new strategy as give a business man to frame out a structure to being a part of today’s competitive world. The innovation in a work is always necessary.
Using of Social-Media in today’s world can lead to help business entrepreneur as well as many platforms for their promotions, today’s generation is mostly depending on social-media platforms for their entertain purpose, this would lead to increase the reach of the brand of the product. The technology or digitalization structure has also affected the Stock Trading market in India, leads to increase the stock trading process effectively and efficiently.
With the advent of modernising ad upgradation of digitalization, the virtual world has invented Digital Money, i.e., Cryptocurrency, which is an online money, can easily be store in e-wallet or digital wallet on computer or other hardware devices. The currency of modernisation world use for a payment as well as investment purpose, which can be buy with a credit card or through mining process. The valuable and intangible objects have a different applications and networks such as online social networks, online social games, virtual words, peer to peer networks. The use of virtual currency has become widespread in many different systems in recent years.[i]
This paper leads to discuss questions like “Will Cryptocurrency be the next currency platform?” “Are virtual platform being safe enough to be used?” “Will Cryptocurrency will improve the Indian Economy?”
RISE OF CRYPTOCURRENCY IN INDIA
According to IMF, India is a fastest growing emerging economy in the world, people are moving forward for using of telecom and internet services in a world -wide sense, they are becoming more technological advanced. The cryptocurrency has been operated in India from a number of years till now.
As early 2012-13, the small-scale of a people start using Bitcoin transaction, in these early days only Bitcoin hobbyists have interest to invest or to transaction, in India a business man in Mumbai starts a Pizza store namely, Kolonial, with starting a new trend of accepting payment i.e. by Bitcoin or doing transactions with Bitcoin.
In a short span of time, the Cryptocurrency has begun to spring-up widely within the country. India leading cryptocurrency trading companies like B-Tex India, Uno coin, Coin Secure, starts offering cryptocurrency and trading services in India. Later on, Zebpay, Bitcoin-India, koinex emerged in this trading market. With these trading companies, the cryptocurrency has grown-up very smoothly from its modest level in 2013 to onwards.
Emerging market of cryptocurrency leads to a increase a number of cryptocurrency Over-The-Counter shops as well as Cryptocurrency ATM’s set-up in the country as a cryptocurrency economy hub.
HOW DEMONETISATION POLICY AFECTS CRYPTOCURRENCY MARKET?
The Demonetisation policy which was introduced by P.M. Narendra Modi on November 08, 2016 has suddenly affects the certain increment of large orders of Bitcoin or other currencies and sell them on a later date, which means to circulate the wealth through banking systems so that tax and other burden should be removed. After the enactment of Demonetisation Policy in India, approx. 40% of people start using or invest in cryptocurrency, which lead to a 2%[ii] of total global cryptocurrency investment.
The Indians have many restrictions for doing a transaction internationally by cryptocurrency, Indian government imposes certain rules, regulations and warning for not efficiently transacting of cryptocurrency, the Lack of Mining facilities also affects the Indian.
R.B.I also give warning to the citizen who uses cryptocurrency constantly, but the government doesn’t impose any ban on cryptocurrency circulation, and also, they haven’t exactly endorsed it.
Cryptocurrency Regulation Bill, 2021: An opportunity for Indian
The cryptocurrency regulation and digital currency bill, 2021 will give an immense surprise to an Indian people who are willing to invest in cryptocurrency. However, the Finance minister Nirmala Sitharaman indicate that rather than an absolute ban, there may be experimentation, exploration and encouragement of the emergent technology behind these. The Marketing committees giving suggestions of Central Bank Digital Currency, which will be regulated in country.
Given the rapidly-evolving crypto developments, policymakers and regulators appear to have taken an opportunity to proactively embrace a promising technology. Global use cases are growing, as cryptos go mainstream with widespread applications.
When RBI banned crypto purchases through Indian banking channels, the Supreme Court struck it down, stating that while RBI[iii] was empowered to regulate cryptocurrencies, such power must be exercised with proportionality, backed by adequate empirical evidence.
Cryptocurrencies also present opportunities that the government and regulators must catalyse. There is adequate empirical research on how decentralized, peer-to-peer finance through blockchain-based cryptos can make financial services more accessible, cost effective, efficient and interoperable. The FATF[iv] had as far back as 2014 highlighted the potential for financial inclusion through appropriately-regulated virtual currencies. India could use them to deepen its financial markets.
CONCLUSION
Analysts have speculated that the new cryptocurrency bill might impact some existing investors who are already investing in private digital currencies like bitcoin in the country. This is because if the Centre goes by the recommendation of the Inter-Ministerial Committee (IMC) then private cryptocurrencies will be banned in the country which will understandably cause a loss to the existing crypto investors of the country. However, it is still not clear if the new legislation will include Bitcoin or Ethereum under the list of banned private cryptocurrencies. The proportionate, proactive, participative and process-driven regulation of cryptocurrencies will aid the success of Digital India. The regulation and acceptance of cryptos can be done in two stages. A CBDC can mark the start of India’s journey into the world of digital currencies, but must not be an end in itself. Private cryptos may well be sustainable under regulation and could also help the government and central bank meet key policy objectives. Today, India has a chance to be a global leader in framing the regulatory architecture for a new digital world. The democratized and appropriately-regulated use of cryptocurrencies is an opportunity that the country must seize.
REFRENCES [i] Shailak Jani, The Growth of Cryptocurrency in India: Its Challenges & Potential Impacts on Legislation URL: https://www.researchgate.net/profile/Shailak-Jani/publication/324770908_The_Growth_of_Cryptocurrency_in_India_Its_Challenges_Potential_Impacts_on_Legislation/links/5ae1720a458515c60f660076/The-Growth-of-Cryptocurrency-in-India-Its-Challenges-Potential-Impacts-on-Legislation.pdf [ii] Sunil Mehta,L. Viswanathanare: Crypto Regulation Offers Indian an opportunity that must be seized: https://www.livemint.com/opinion/online-views/crypto-regulation-offers-india-an-opportunity-that-must-be-seized-11616000126545.html (17 Mar 2021, 10:29 PM IST) [iii] What To Know About Cryptocurrency and Scams: https://www.consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams#:~:text=Cryptocurrency%20is%20digital%20money.,or%20bill%20%E2%80%94%20it's%20all%20online.&text=You%20can%20buy%20cryptocurrency%20with,computer%2C%20or%20on%20other%20hardware. [iv] Business Today.in: What is Cryptocurrency Bill 2021; how it will impact bitcoin investors: https://www.businesstoday.in/current/economy-politics/what-is-cryptocurrency-bill-2021-how-it-will-impact-bitcoin-investors/story/431264.html: (February 14, 2021)