With a boom in cryptocurrency in India, the country become the second-highest among the heaviest users of cryptocurrencies around the world in 2021, according to a report by Chainanalysis.
The crypto market in India grew 641 per cent in the year through June 2021, according to an October report by the industry research firm.
Vietnam is the undefeated winner of the ranking and Pakistan is in the third position, according to the research, scoring high on overall crypto transaction value as well as payments made by individuals.
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“Many emerging markets face significant currency devaluation, driving residents to buy cryptocurrency on P2P platforms in order to preserve their savings,” the report stated.
The reason behind the crypto-fever in India, according to the report is that investing inequities in the country is a ‘long, painful’ process that requires them to sign a lot of documents. It takes about three or four days. Investing in crypto takes less than an hour.
“As for the large stock market, much of the popularity to centralised exchanges becoming more difficult to use for users in areas with uncertain regulations like India,” Krishna Sriram, Managing Director at Quantstamp was quoted in the research.
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However, Indian investors have been sceptical over crypto being a legal tender in India with Finance Minister Nirmala Sitharaman’s clarity on taxation of virtual digital assets and proposed to impose a 30 per cent tax on gains made on such trades, besides subjecting crypto transactions, beyond a threshold, to one per cent TDS.
Except for El Salvador, which in September last year adopted Bitcoin as legal tender, no other country has made crypto a legal tender.
India is working on legislation to regulate cryptocurrencies, but no draft has yet been released publicly.
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The government had listed for introduction the ‘Cryptocurrency and Regulation of Official Digital Currency Bill’ for regulating cryptocurrencies in the previous session of Parliament. The bill comes amid concerns over such currencies being allegedly used for luring investors with misleading claims. Currently, there is no regulation or any ban on the use of cryptocurrencies in the country.
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