Worldwide cryptocurrency adoption is a favorable option for investors and developers, as it would not impede them anymore. For now, very few countries allow the trading of crypto on exchanges freely, while others have completely banned it.
Indeed, the lack of regulation and proper guidance for taxation on these digital assets is confusing people, who just want to make additional income from crypto or contribute to their pension funds. Since controlling cryptocurrency is close to impossible, illicit actors can easily steal assets or take control of blockchain through staking.
Therefore, without a balance between both aspects, it may be almost impossible for crypto to become less volatile. The price of Bitcoin has already experienced massive spikes due to ever-changing supply and demand or media coverage, but you can buy Bitcoin safely.
Still, we can gradually see the light at the end of the tunnel since massive economies seem to take a new path towards crypto, such as India’s bill.
What is India’s View On Crypto?
India is one of the countries that has recently approved crypto to bring wealth and improvement to the area. In 2021, the government introduced the Cryptocurrency and Regulation of Official Digital Currency Bill to increase the value of digital currency from the Reserve Bank of India (RBI).
Since then, regulations have been continuously delayed, which is unfortunate for all potential investors. For now, there are no guidelines concerning any crypto-related aspects, and taxing is still being developed. Regardless, people should expect a tax of 30% on crypto gains and 1% deducted. The government is not against these digital assets, but we’re not sure when it will regulate them as well.
What Are The Risks Of An Unregulated Crypto Market In Such A Big Country?
While not many countries realize it, not regulating crypto is a serious problem for their financial integrity and security. That’s because working with exchanges that cannot protect users can only lead to risky investments and considerable losses, which we’ve seen in the past years with various crypto businesses.
In India, the most prominent exchanges include WazirX or CoinDCX, which has experienced massive trading volumes in the past years due to an increase in interest from regular people.
Which Countries Have Banned Crypto?
At first, many countries banned cryptocurrency due to the lack of knowledge on the matter. However, this has changed in the past years, when more and more areas of the world have opened their doors to foreign investors. So, for now, only the following countries are still banning crypto:
- Bangladesh
- China
- Egypt
- Iraq
- Morocco
- Nepal
- Tunisia
- Qatar
It might take some time until cryptocurrencies reach legal grounds in these areas as well. Still, there are many countries that prefer using blockchain technology instead of accepting cryptocurrencies because it is more valuable for the government. In some parts of Africa, we’ll find that organizations are pushing for blockchain to be used in official businesses and governmental systems in order to safeguard user data and efficiently organize it.
Still, How Many Indians Leverage Cryptocurrencies?
Considering the size of the country, one would assume that many people choose to invest in Bitcoin, given its popularity and citizens’ struggles to access and benefit from financial services.
According to Forbes India, there are about 115 million investors across the country, and a considerable part of them are concerned about the uncertainty surrounding new regulations. People are worried about the security of their investments, especially since there’s not that much education on data breaches, for example.
At the same time, the lack of security from the government poses certain limitations on the expansion of the industry. Since people are either unsure of what crypto to invest in or they’re not confident in managing the risks that come with owning a crypto portfolio.
So, What Should Indian Investors Expect?
The world of cryptocurrencies moves slowly, so there’s not much to expect in the near future. Given its evolution in the market, it may be possible for governments to adopt Bitcoin at some point, but every country has the option to delay the movement if the economy isn’t ready to face such a challenge.
Although India seems open to leveraging the investment, it’s more likely that blockchain will become part of governments and Indian systems earlier since the “National Strategy on Blockchain” was already developed in 2021. The aim of the program is to encourage developers to contribute to the creation of blockchain technology “Made in India” by 2027 through the help of AI, IoT, and cloud.
Blockchain technology would be used for land registration, digital certificates, and customs duty payments, so it would have real-life usage.
What Strategy Should Investors Adopt Until Regulation Is Working?
The lack of regulation doesn’t discourage most investors from continuing their activities, so they are still looking for ways to make it work despite governmental challenges. Therefore, they need to update their strategies and be more careful about how they safeguard their portfolios.
Indian investors could continue investing in Bitcoin and Ethereum, as well as use less-known cryptocurrencies, but it would be best to avoid newly crypto projects as many can be an undercover social engineering or advertising methods.
Moreover, choosing to invest for the long term is the preferred method because it can protect investors from massive price spikes, especially with Bitcoin, since it’s a highly volatile asset. One of the best long-term strategies includes HODL (hold on for dear life), which means holding assets for as long as possible without selling them. This way, their value increases over time, and the portfolio is less susceptible to becoming obsolete in the future.
Will India Push Forward Innovation In Cryptocurrency?
India is one of the countries with millions of crypto investors that are still not regulating these digital assets due to a lack of stability. Although crypto isn’t banned, it’s not accepted either, so holders cannot use their assets in the real world and will only have to continue trading or investing. Until regulation happens, people need to secure their portfolios and adopt a long-term strategy.
