India’s experience with cryptocurrencies has not been without its share of ups and downs. The virtual asset has experienced several dangers, from a prohibition to impending tight regulations. Despite such uncertainties, investments in unregulated digital assets, especially Bitcoin, have shown a startling rising tendency since 2020. According to data from several domestic cryptocurrency exchanges, between 1.5 and 2 crore Indians have invested in the asset class, reaching the $10 billion milestone in November of this year. Let’s look at the virtual asset’s journey in India so far.
Launch of cryptocurrencies in 2008
The journey of cryptocurrency started with the publication of a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” in 2008 by a pseudonymous developer Satoshi Nakamoto.
2013-2018: RBI Issues First Circular Regarding Cryptocurrencies
The Reserve Bank of India (RBI) released a circular in 2013 alerting consumers to the potential security-related dangers associated with using virtual currencies as crypto investments increased in India. Finally, by the end of 2017, the RBI and the finance ministry issued a warning stating clearly that virtual currencies are not a form of legal money.
#IndiaWantsCrypto in November 2018
Nischal Shetty, the founder of WazirX, launched the #IndiaWantsCrypto campaign on November 1st, 2018, ten years after Nakamoto’s article called for the favourable regulation of cryptocurrencies in India.
2021: Publication of the Crypto Bill
The Standing Committee on Finance came to the conclusion that cryptocurrencies should be regulated rather than outlawed after meeting with the Blockchain and Crypto Assets Council (BACC) and other cryptocurrency stakeholders in November 2021.
So far, So good!
Despite clarity surrounding the future of the unregulated digital asset, adoption of cryptocurrencies has accelerated significantly over the past two years, with India now serving as the largest investor. According to the existing signs, India will implement a strict regulatory framework to deal with cryptocurrencies. The government would probably treat cryptocurrency as an asset class rather than a form of money. The journey of cryptocurrency posts the parliamentary bill is yet to be unfolded.