Back in 2018, India outlawed “any service in relation to virtual currencies”. And if you were dabbling in cryptos, you could face prison time.
The original ban was imposed by the Reserve Bank of India (RBI), which clearly feared crypto would undermine its authority.
Fast-forward to March 2020, and India's Supreme Court overruled the RBI, calling the ban “unconstitutional”.
Since then, India's crypto market has boomed!
Triple-digit sign up growth and double-digit trading growth in a matter of months!
When India’s Supreme Court overturned the banking restrictions for crypto exchanges back in March, everything changed.
One of the largest crypto exchanges Binance, joined the Internet and Mobile Association of India (IAMAI), which played a key role in overturning the ban. Binance has noted explosive growth via WazirX, its Indian exchange acquired in 2019.
The exchange saw 150% more signups in many Indian cities from February 2020 to May 2020, which boosted local trading volumes by 66%.
Reasons for this growth?
Ashish Singhal, the Bangalore-based CEO of both the crypto wallet CRUXPay and the exchange Coinswitch.co, who added 25,000 users to his own platform since the coronavirus crisis began, puts it down to…
• Tech-savvy Indians diversifying their wealth into cryptos
• Investors hedging against the Covid-Crisis to protect their wealth
And crypto usage isn’t the only market seeing growth in India…
There’s also been growth in the usage of decentralised applications (dapps)
This is according to Matic Network co-founder Sandeep Nailwal.
The Matic Network is a dapp-ready sidechain designed to take some of the heavy lifting off the bottleneck-prone Ethereum network.
Within the first month of rolling out an Ethereum scaling solution, Nailwal said his start-up garnered roughly 60 dapps and is currently in the process of bringing on-board another 60.
“Especially with crypto, people are able to play games and earn money out of it. Real money games are becoming more popular. We’re seeing a lot of applications because Ethereum is completely choked up.”
The last point is quite crucial as it shows that the use of Ethereum (whether using the blockchain or crypto) is soaring in India. And this is good news for Ethereum investors.
Why this growth is only the beginning…
India is still vastly untouched when it comes to cryptos. For starters, many Indians still aren’t familiar with what cryptos are and how they work.
What’s more, with the ban only being overturned a few months ago, many people still believe cryptocurrency is banned in India.
But this is all starting to change. Some say in the future, India could easily become one of the biggest crypto markets in the world!
Remember, India has a population of 1.3 billion, second only to China, and growing at a much faster rate. And it’s also the world’s third biggest economy.
That means, as India gets behind crypto, it will create more demand than we’ve ever seen, which is great news for prices – especially bitcoin and Ethereum as they’re the most popular cryptos to use in India.
In short, the Indian market could certainly drive cryptos into the mainstream!
See you next week.
Managing Editor, The South African Investor