Cryptocurrency in India and its Benefits for Digitization

The emergence of cryptocurrency in India dates back to 2013 when a pizza enterprise in Mumbai allowed the use of Bitcoin as payment. Henceforth the movement towards digital payment methods has taken effect, leading to a rise in cryptocurrency exchanges and ventures allowing its use. With a large youth population in India today, it is inevitable that there will be a digital takeover of erstwhile paper transactions.

That does not mean that a formal unexploited mode of payment will coexist with the Indian financial system without any regulation from the government. It brings about a huge economic change and burden on old-school investors with it, necessitating Indian official interference. Thus created a unique Indian context for cryptocurrency but despite the obstacles, it is currently in full bloom.

Cryptocurrency for Digital India

There are around 200 thousand cryptocurrency traders entering the market each month and over past year approximately 3.5 billion dollars in transactions have been made. Most nations have decided their position on cryptocurrency entering their financial markets, including India through the Reserve Bank, which has advised caution when dealing with an unpredictable market like this one.
For the past five years of cryptocurrency growth in the country, no legal regulations or frameworks were applied to investment or trade in the market. Finance minister, Arun Jaitley, stated that digital currency like Bitcoin and its variants could not be used as alternative currency to INR as they have no legal tender in India. However, as of February 1st, 2018, the Union Budget included cryptocurrency in its pronouncement stating that government will take necessary measures to control illegal actions facilitated by cryptocurrency and will look into digital ledgers for its Digital India scheme.
The announcement of trading regulations in the crypto market has sprung the creation of guidelines such as tracing the source of digital transactions to tackle black money being peddled into the market. This protects investors and can curb illegally funded activities such as terrorism. In India, all exchanges made via cryptocurrency are KYC compliant which means the details of the trader are registered or an identity authenticated and transactions are made with digital banks.
India Stack

The Indian initiative is an application programming interface which enables the government, organizations, developers, and businesses to digitally maneuver their transactions in a cashless way. This platform operates on the Aadhaar ID system, with a registered 1.2 billion citizens. To genuinely become a cashless system, India Stack will require a blockchain operated a network of cryptocurrencies that have government approval. The unification of India Stack with blockchain can revolutionize the mode of payment and investment in India, even clearing out corruption, laundering, and tax fraud. It will also mean a decentralized market with increased efficiency in online exchange and transactions, as well as a reduction in overseas taxes, surcharges, and more. With cryptocurrency embedded into a legal system, there is only room for improving India’s GDP and overall financial markets worldwide.

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