The need for crypto regulation in India

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Crypto! Blockchain! Bitcoin! We’ve all heard of them. And what we may have also heard is a lot of sensationalism, skepticism, and quite a bit of resistance – and that’s understandable.

We may have read articles about multi-million dollar NFT sales, seen the Dogecoin drama unfold on Twitter, seen price uncertainty, seen ransomware hackers being paid in Bitcoin and worried about the environmental impact of cryptocurrency mining.

As a cryptocurrency thought leader and advisor to cryptocurrency and fintech startups, I get asked a lot of questions about crypto. I’ve noticed that many of these questions often have their origins in fear and ignorance – and for good reason, this is a very poorly understood innovation, says Siddharth Menon, co-founder and COO, WazirX.

However, behind the sensational headlines and perceived volatility, a bigger move was taking place. Cryptocurrency and the blockchain that underlies it are evolving as a powerful and decentralized alternative to the dominant fiat system of money and banking. In short, crypto has yet to have its best time.

The idea of ​​digital currency is very new, and central banks around the world are still weighing the implications of such technology. Nonetheless, the ambiguity around the technology indicates understanding the need for crypto in India before moving on to the need for crypto regulation in India.

Crypto: an investment alternative?

For India, blockchain, cryptography and new innovations in the fintech sector show that they can improve the status quo, advance the concept of digital currency, and accelerate the digital payments ecosystem.

The pandemic has amplified some of the value propositions of cryptocurrency and decentralized finance. In fact, a new report has found that the number of people using cryptocurrencies around the world has more than doubled since January, reaching 221 million last June.

With 80 lakhs of users, WazirX has seen a massive 2,648% user enrollment growth in Tier II and III cities nationwide, observing a higher participation of small-town women compared to their urban counterparts. The cryptocurrency exchange has also recorded $ 26 billion in overall transaction volume since January 2021, said Nischal Shetty, CEO of WazirX.

Remittances are also one of the key areas where cryptocurrency benefits Indians. Every year, Indians residing abroad send billions of cash home.

India can have a clear advantage by being a forerunner in the global crypto landscape. It is also well placed in terms of technological talent pool, startup ecosystem and digital infrastructure. As a pioneer in space, India could create more jobs and have a very real chance to become a leader among the global cryptocurrency elite. However, it all starts with a strong regulatory framework. A lack of regulatory clarity can lead to greater uncertainty, less participation of entrepreneurs and users, loss of tax revenues, capital and financing, and possibly a brain drain.

India should take inspiration from developed countries such as US, UK, Japan, Australia and EU region etc. which regulate crypto in a way that promotes innovation and fight crime at the same time.

This is a good sign and shows that our lawmakers are deliberating and understanding this technology instead of rushing into it. This is a very important bill that concerns both finance and technology, and I do not think the government will pass a bill without considering the views of stakeholders. I am optimistic that India will be part of this innovation through regulatory clarity, says Nischal.

#IndiaWantsCrypto

A crypto advocate and advisor in India, Nischal has been running a #IndiaWantsCrypto campaign since 2018 to raise awareness among the masses and urge lawmakers to introduce positive crypto regulations in India. He took this approach as an industry-wide approach instead of an organization-wide approach. Every day he was tweeting – engaging and developing the crypto ecosystem in India by spreading the right crypto education and his vision for making cryptocurrencies accessible in India. His efforts culminated when Rajeev Chandrasekhar, India’s Minister of State for Skills Development and Entrepreneurship and Electronics and Information Technology, engaged with one of his tweets.

Nischal also believes that advocacy, education and collaboration are essential to develop the crypto landscape in India. WazirX is also part of the Internet & Mobile Association of India (IAMAI) and is working on a self-regulatory code of conduct for crypto companies in India.

He believes crypto enthusiasts should be both users and active participants in the landscape as advocates, brand ambassadors, thought leaders and mentors. Collaboration is the key to winning at scale, he says, not only for your own startup, but for the ecosystem as a whole.

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