India, a well-known source of gold demand, turns a keen eye on crypto

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India has long been known to be a strong source of demand for gold – not only for the preservation of wealth, but also for cosmetic and jewelry purposes.

But now it looks like something else has caught the country’s attention: crypto.

This could mean that the mantra that Bitcoin is the equivalent of digital gold could actually spread, Bloomberg noted this week.

Indian households own over 25,000 tons of gold and, despite this, crypto investments across the country have grown from around $ 200 million to $ 40 billion in the past year, according to the report. .

The demand runs counter to the country’s central bank’s “outright hostility to the asset class”, the article notes. There are now over 15 million Indians who buy and sell cryptocurrencies, compared to 23 million in the United States and 2.3 million in the United Kingdom.

A microcosm of the changing demand is Richi Sood, 32. She put around $ 13,400 – which she borrowed from her family – in crypto instead of gold. After buying Bitcoin, Dogecoin, and Ether, she cashed in part of her position to help fund her start-up. She said: I’d rather put my money in crypto than in gold. Crypto is more transparent than gold or property and returns are faster.

Sood represents the origin of much of the growth in India: people between the ages of 18 and 35. “Indian adults under 34 have less appetite for gold than older consumers,” Bloomberg wrote, citing data from the World Gold Council.

Sandeep Goenka, who co-founded ZebPay, said: They find it much easier to invest in crypto than in gold because the process is very straightforward. You go online, you can buy crypto, you don’t have to verify it, unlike gold.

Keneth Alvares, 22, said: I think over time everyone will adopt it in all countries. Right now it’s all scary with the regulations, but that doesn’t worry me as I don’t plan to remove anything just yet.

Some of the growth can be attributed to the country’s Supreme Court overturning the order banning crypto trading by banking entities. This has led to a surge in trading, despite the country’s central bank showing “no signs” of adopting cryptocurrencies.

Other countries like the UK have cracked down on crypto as well, with the latter banning Binance Markets from doing regulated business in the country.

This regulatory environment means that large investors are less likely to speak openly about their holdings. Bloomberg spoke to an investor who had over $ 1 million in crypto; he said he was concerned about the prospect of retrospective tax hikes. It has “contingency plans in place to move its transactions to an offshore bank account in Singapore” if a ban were to be enacted.

The smallest investor in India, however, appears to embrace the regulatory environment with ease. Sood concluded: I fly blind. I have an appetite for risk taking, so I am willing to take the risk of being banned.

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