Can 2023 be a game changer for the crypto ecosystem?

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The Indian crypto market has a bright future with over 3 crore crypto app downloads between August 2015 and June 2022. According to Bank for International Exchange data, India currently ranks third in the world in terms of number of crypto-related app downloads, second only to the United States and Turkey. Prevailing market conditions, rising crypto awareness, access to smartphones, and improving internet capabilities are all contributing factors to the adoption of crypto in India. India’s role as a digital economic powerhouse is expanding, which will be hugely beneficial to the crypto market given its growing middle class and young tech-savvy user base. Let’s take a look at what the future of the crypto industry looks like.

A report on 2022

2022 has been a difficult year for players in the crypto and Web3 ecosystem. It’s been a cold winter, however, as with any new asset class, expect a fair amount of volatility.

India has made an effort to regulate cryptos this year by imposing a 30% tax on crypto earnings on top of a 1% TDS. Finance Minister Nirmala Sitharaman has sought a global coalition to regulate crypto and establish standard operating procedures. The regulatory noose is tightening and at the same time the market has seen a major correction from 2021 levels. One of the largest crypto exchanges in the world, FTX, filed for bankruptcy this year. This black swan incident was the result of poor corporate governance and questionable business practices. It remains to be seen when the government will step in and pass legislation to establish frameworks for the sector.

The good news is that several other positive developments are taking place around the world. Hong Kong Crypto Legislation has announced plans to legalize crypto retail trading from March 2023. It will impose a compulsory licensing regime for crypto trading platforms that support retail trading.

Metamask also revealed that it will work with PayPal to allow users to fund their wallets with Ethereum. Even Google has said that from 2023 it will accept crypto payments for its cloud services.

How will the crypto world behave in 2023?

Despite its hurdles, India-focused crypto companies are confident in creating a growth-oriented environment. According to a 2021 United Nations Trade and Development Report, more than 7% of Indians owned digital assets in the form of cryptos. Despite the pandemic, every 14th Indian, according to the report, has invested in new age assets. If awareness and adoption continues at this rate, the majority of people will own crypto within the next decade.[3] As the financial industry evolves, new investors will begin to consider the implications of investing in crypto. Soon, every investor will be able to include crypto assets in their portfolios, making it an asset class for everyone.

G20 Presidency

India, which now holds the presidency of the G20 Leaders’ Summit for a year, plans to hold talks with member countries on crypto regulation during its tenure. These nations include France, Germany, Russia, United Kingdom, United States, China, Russia, and Canada, among others. Crypto standard operating procedures are something India plans to develop during its G20 presidency. [4]This provides a favorable framework for the entire Indian market.

The future

The crypto industry will likely see increased regulation in 2023, even as more mass-market retailers start accepting digital assets. We expect the market to become more stable as a result of government regulation of crypto. Additionally, regulations can protect long-term investors, stop fraudulent activity, and offer clear instructions for businesses to innovate in the crypto economy.

Conclusion

In conclusion, we can say that the crypto industry should rebound from the bearish phase of 2022. Bitcoin, Ethereum and other major tokens will spearhead the recovery. India can become a leading global center for blockchain and crypto in the coming years with its vast technical talent. Government regulations will play a key role in propelling this growth. Crypto will be a major part of the future monetary system as the size of the digital economy grows and more Indians become aware of crypto.

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The opinions expressed above are those of the author.

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