India’s crypto boom triggered by Covid-19

The popularity of cryptocurrency in India has soared this year, with smaller cities in the nation becoming a hub for potential investors.

India has had a complicated relationship with cryptocurrency and, at one point, planned to ban it completely, but scrapped the idea after the Reserve Bank of India feared its attitude towards digital assets would force jobs elsewhere.

Despite the government’s hesitations, small cities throughout the country have, according to the exchange WazirX, recorded a 2,648% growth in adoption.

Speaking to the Indian Times, WazirX CEO Nischal Shetty said: “Tier-2 and tier-3 cities have driven almost 55% of total user sign-ups on WazirX in 2021, thereby overtaking tier-1 cities, which demonstrated a sign-up growth of 2,375%.”

It is understood the massive uptake is, in large part, due to the Covid-19 pandemic which left much of the population stranded at home. In cities like Lucknow, Bhopal, and Patna, many IT professionals, engineers, and start-up owners were among the new-age investors.

Potential regulations

The Cryptocurrency and Regulation of Official Digital Currency Bill is still under consideration in parliament, and the apparent dithering over it has sent nervousness permeating across India’s crypto industry.

While cryptocurrency will not become valid tender for payments, the bill will help lead the RBI in forming its own central bank digital currency.

Many see the potential regulation of cryptocurrency as a positive step towards the future.

“This step is very positive for the crypto industry and I’m glad that the government is taking this direction towards crypto regulation,” added Mr Shetty.

“This will bring more clarity for the entire industry and push more entrepreneurs into this sector. It will reduce the fear of VC investors wanting to invest in the crypto industry in India.”