Can India Emerge as The New Bitcoin Capital of The World?

On 4 March 2020, the Supreme Court of India passed a judgment, which had substantial implications on the cryptocurrency ecosystem worldwide. The Supreme Court overturned a ruling of the central monetary and financial bank, the Reserve Bank of India. The Court lifted the bank on trading, selling, buying and giving cryptocurrencies a legal position in the country.

Can India Emerge as The New Bitcoin Capital of The World?
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This not only sent the entire ecosystem into a frenzy but raised the hope of one of the biggest economies in the world coming onboard the new wave. In this article, we are going to examine a brief history of Bitcoins with India. We are also going to look at what the promise of the Supreme Court means for Bitcoins in India in a larger context.

Why the Supreme Court Judgment on Bitcoin is so important?

Before the RBI and other government agencies began a serious crackdown on cryptocurrencies and exchanges in the country in 2016-18, the country was doing pretty well. India had some large cryptocurrency exchanges dealing with Bitcoin trading.

However, the tough stance of the RBI and the government meant that many of them had wound up their operations. Bigger exchanges like WazirX, Cashaa, and ZebPay boast of thousands of members and the huge volume of trades.

The global community is celebrating the judgment because the following reasons:

i. India is a relative virgin market when it comes to Cryptocurrencies. Even though the foundations and bare skeletons are there, lot needs to be done.

ii. The recent digital and internet penetration in India’s hinterlands provides a great opportunity to take cryptocurrency mainstream.

iii. The recent Coronavirus lockdown and the related tanking of the stock market means Indians are looking for newer avenues to make investments.

iv. In terms of the sheer size of the population and the economy, India can make a substantial difference to the future of cryptocurrencies in the entire world.

v. India is being looked at as a strong alternative to China and its new Digital Yuan. However, is still very much in the works.

What is the Legal Status of Bitcoins in India after the Supreme Court Judgement?

It should be pointed out that the Government of India has been sitting on a draft bill relating to Cryptocurrencies for the last two years. It was supposed to be tabled in the Winter Session of the Indian Parliament in December 2019; however, it was never placed.

It is interesting to note that the RBI’s lawyer, while presenting the case before the Supreme Court stated that there is no nationwide lay banning cryptocurrencies in India. There were circulars, which was offered to different ministries and departments warning about the bad repercussions of cryptocurrencies.

It pointed to a standard and steady opposition to any new form of digital currency that has the potential to cause any risk to the financial system. The RBI lawyer kept arguing that it is risky for the people to trade in cryptocurrencies in the absence of legal frameworks.

The RBI also pointed out that any such form of digital currency can only be bought by the state and not by a decentralized entity. However, the court trashed their arguments and gave the Indian crypto community its biggest win in recent years.

What is the future of Cryptocurrencies in India?

Most Indian exchanges have already started accepting payments in INR for Bitcoin trading ever since March 5. In a very short span of time, they have seen millions of people and money showing interest in adopting Bitcoins and other crypto as an investment option for the future. Many people are also turning to bitcoin trading platforms to get registered and start trading on Bitcoins immediately. Click here more about trading apps.

As of now, the CEOs of the Crypto Exchanges in India have written to the Supreme Court asking banks to comply with the ruling and integrate the banking system with exchanges and businesses related to cryptocurrencies.