By Kumar Gaurav
In India, the story of cryptocurrency has been a source of much deliberation and discourse in recent years. Initially viewed as a niche technology favoured by a limited cohort of enthusiasts, cryptocurrency has now established itself as a mainstream phenomenon that has captured the attention of diverse stakeholders ranging from investors to policymakers. The growth trajectory of cryptocurrency can be attributed to a confluence of factors, including technological innovation, financial speculation, and political activism. As its popularity and influence continue to soar, it is evident that India stands to benefit significantly from the creation of a flourishing cryptocurrency economy that can effectively address some of the most pressing challenges confronting the nation today.
The issue of financial inclusion is a paramount concern that necessitates the establishment of a robust cryptocurrency economy in India. The World Bank’s alarming statistics lay bare the grim reality of financial exclusion in India, with a staggering 190 million individuals deprived of access to formal financial services. Cryptocurrencies notably have the potential to promote financial inclusion in India by developing a comprehensive financial ecosystem that extends opportunities to those who have been historically marginalized by the conventional banking system. The decentralized and peer-to-peer approach of cryptocurrencies circumvents intermediaries like banks, empowering the unbanked population to engage in financial transactions and participate in the thriving cryptocurrency economy.
Innovation and Technology
Innovation and technology constitute yet another compelling rationale for the development of a thriving cryptocurrency economy in India. Cryptocurrencies are predicated upon blockchain technology, a distributed ledger that affords a safe and transparent methodology for documenting transactions. As per Nasscom, the apex industry association for Indian IT, blockchain technology possesses the capacity to generate $5 billion in commercial value for India by the year 2025. Its transformative potential spans diverse industries, from finance and healthcare to supply chain management, and can catalyze a sweeping revolution in the business landscape. So, a flourishing cryptocurrency economy is imperative to harness the immense potential of this cutting-edge technology and unlock a new era of growth and progress for India.
Cryptocurrencies have the potential to significantly bolster India’s economic growth by fostering investment and generating employment opportunities. As more businesses and innovators foray into the cryptocurrency domain, the demand for adept professionals to design and oversee their platforms will escalate. This will result in the creation of new avenues for employment and serve as a catalyst for economic expansion. By providing a fertile ground for innovation and entrepreneurship, a thriving cryptocurrency economy can leverage its potential to fuel India’s economic progress and promote sustainable development.
The sizeable Indian diaspora spread across different nations of the world presents another convincing explanation for the establishment of a thriving cryptocurrency economy. As the world’s largest recipient of remittances, India received over USD 87 billion in 2021, as per the World Bank. Cryptocurrencies, therefore, present a means of expediting and safeguarding cross-border transactions without the necessity of intermediaries, such as banks or remittance services. This can significantly reduce the cost and complexity of international money transfers, allowing people to support their families and invest in their home country with greater ease. By leveraging the power of cryptocurrencies to facilitate cross-border transactions, a thriving cryptocurrency economy can open new avenues for financial growth and promote greater financial inclusion for the Indian diaspora.
Protection against Inflation
Finally, cryptocurrencies present an invaluable hedge against inflation, which has been a persistent challenge for the Indian economy. Inflationary pressures have historically eroded the value of individuals’ savings and investments, rendering them increasingly susceptible to financial uncertainties. Cryptocurrencies, in contrast, are specifically engineered to be deflationary, wherein the availability of the currency is restricted, thereby prompting its value to appreciate over time. By providing a safeguard against inflation, cryptocurrencies furnish a means to shield individuals’ wealth and instil within them a heightened sense of confidence regarding their financial futures.
The multifarious advantages of a thriving cryptocurrency economy in India are incontrovertible. From bolstering financial inclusion and enabling seamless cross-border transactions to providing robust protection against inflation and stimulating economic growth, the benefits are manifold and far-reaching. By embracing this nascent yet transformative financial paradigm, India can position itself as a global leader in the cryptocurrency landscape, while simultaneously ushering in a new era of financial democratization and prosperity for its citizens.
The author is founder, CEO, Cashaa