Let’s rewind to the year 2018 when #MeToo was trending on social media, the sky was filled with rainbow colors of the celebration of the LGBT community and ISRO hit a century with the launch of its 100th satellite. And the grand celeb weddings of #nickyanka and #deepveer brought a spark in each of our lives!
Along with all this, came the historic verdict of the ban of cryptocurrency in India as the Supreme Court refused to address this electronic form of money as legal tender. Now in 2020 with the whole world being digitized, the Supreme Court decided to lift the ban this March. It is a big step for the whole fintech industry. People can now freely trade in the blockchain community. Block what community? Don’t worry we’ll take you in and out of this virtual money world in no time.
What is Cryptocurrency? Meaning
Cryptocurrency is like any other currency used as a medium of exchange only, it is digital. Unlike normal currencies, crypto is not issued by government authority and is rather operated by its network called the cryptography which keeps an account of all the holders and the transactions made by them. You can see it as online ‘tokens’ you’d spend to buy something,
Like in a video game. Exciting, isn’t it? This whole process of virtual exchanges is made possible by the blockchain technology. It’s nothing but blocks of information stored in the virtual world in large chains. Bitcoin, Ethereum, XRP, Tether rank high in the list of top 10 cryptocurrencies in the world.
Cryptocurrency in India: A Brief History
Ok, sit tight as we unveil the story of the Digital currency.
The tale of cryptocurrencies in India began back in 2008 when a group of pseudonymous developers published a paper about Bitcoin. The spread of the network was rather slow and the first-ever transaction was made by a man in 2010 which was 10,000 bitcoins for 2 pizzas. Yes, the first transaction was for the love of pizzas!
Then, by 2011 more cryptocurrencies like Litecoin, Namecoin and Swiftcoin started emerging. With the advancements came loopholes and thus criticism. Apparently, crypto was being used on the ‘dark web’ for illegal activities. However, it did not hinder its growth in value.
Bitcoin shot up from 5 dollars in 2012 to approx 1000 dollars in 2017! Due to this, it became a popular investment option among millennial investors. The Demonetisation move of 2016 also gave a push towards digital currency and thus, it was flourishing at that time.
However, no prominent thing goes unnoticed. The government soon started issuing press releases in order to warn people against the use of such currencies.
Finally, by April 2018 the Supreme court declared a ban on the overall functioning of cryptocurrencies owing to safety threats. Several associations disagreed with the decision and filed petitions against it. Due to this, in March 2020 Supreme court lifted the 2 year ban and declared Cryptocurrencies as a viable investment option again.
Is it a good thing? Do the threats still prevail and how is this return of Crypto different than the first time?
Also read details on Fiat Money: Meaning, Examples & Overview of Fiat Currency
Cryptocurrency as an Investment Option
Vis-a-vis the Coronavirus pandemic Cryptocurrencies can be seen as an investment alternative far from the ups and downs of the equity market. But, like any other investment, it too comes with a substantial amount of risk. So the first and foremost part of an investment in cryptocurrency is deep research on the technology. In fact, some scholars believe that the this technology isn’t easy to understand in the first place.
Although, there are several apps like Coinbase, Binance, WazirX, Unocoin, etc. which facilitate tracking and trading cryptocurrencies. And, all you need is a digital wallet, affiliation with a commercial bank to convert crypto to fiat money and tracking devices. It comes with two ways of investment i.e crypto to crypto and crypto to fiat and came to be known as a big innovation in the fintech world. However, its existence is still shaky in the Indian arena.
Crypto in India: Is Re-ban Coming?
There are rumors of the government banning the currency yet another time which has got the investors worried about the future in this virtual currency. This spur was created after an ET report published stating a note by the ministry that said that the government is looking for a law to ban Cryptocurrency in India.
For now, the crypto industry experts believe that these are mere rumors and that an actual ban would not take place. Nischal Shetty, CEO of Wazirx and initiator of the #indiawantscrypto says it was ‘just a note’ and not a fact. He believes that the government would not stop a booming industry. What’s your take on it?
Also, explore some of the Best Virtual Trading Platforms in India
Cryptocurrency in India: Crypto Boom or Crypto Ban?
With the right innovation and regulation, the crypto industry could be the future of currency especially since more attention is being paid to digitization in the COVID world.
In view of this, a crypto firm ‘Ripple’ has introduced a policy suggesting a regulatory framework to allow authorities control over the Crypto industry. Under this policy, it is suggested that SEBI should control and regulate the currency, like all other securities.
Despite the uncertainty of the industry, numerous startups continue to expand their legs in the crypto arena. And guess what? The crypto market has gained rigorous momentum since the ban was lifted. An industry aggregator, ‘Coin switch’ launched an INR cryptocurrency in June. Another such example is Paxful, a global P to P Bitcoin marketplace that recently moved its operations to India. Its founder and CEO, Ray Youssef claimed that the Indian markets hold great potential for the crypto economy.
This immense confidence of the industry experts really does make us re-think. Do you feel the government would take such an impetuous decision? Should there be a legal framework to control the cryptocurrency in India? Will crypto become the new digital currency to deal with soon? Or we still have to wait longer for this virtual currency to be recognized in the real money world. Feel free to share your views and feedback.