Crypto trading boosted in India. What about the RBI’s ban?

Crypto trading boosted in India. What about the RBI’s ban?

Crypto trading was hindered in India due to the RBI’s bank. India’s Reserve Bank forbade to use the bank payment systems for crypto-related payments in April 2018.

Several cryptocurrency exchanges continued to operate despite the ban. They also continued to process rupee payments through peer-to-peer mechanisms in some cases. But such exchanges mainly focused on trading between cryptos rather than new investments in digital coins by Indian investors.

However, the situation changed as the Supreme Court overturned a ban on cryptocurrency payments this month. The crypto industry is growing rapidly in India. Coin DCX, which has been operating during the ban, has seen a sharp rise in users and trading volumes after the SC lifted it.

The company’s founder, Sumit Gupta, announced that Bitcoin to Indian Rupees trading pair had seen a 78.36% growth, while Coin DCX had acquired 50,000 users in less than 50 days. But along with the annulled ban, there are other reasons for such fast growth in India’s crypto industry.

Some traders had come back to the crypto market after the SC judgment. However, Ajeet Khurana, former CEO of Zebpay, noted that people sitting at home have time to trade on their computers during the coronavirus lockdowns. That also helps trading.

Will the cryptos gain more importance in the Indian economy?

It seems crypto industry leaders in India are divided over whether some of the newfound interest in digital currencies is driven by the aggressive monetary policies of central banks. The economic downturn caused by the pandemic is partly the reason for that.

According to Gupta, a tiny percentage of people in India noticed that the power of the rupee is decreasing gradually with great volumes of money printing not only in India but globally. And now, these people are hedging their portfolios towards crypto.

Some investors even drew a parallel between gold and virtual currencies. But the majority thinks that Bitcoin currently doesn’t have the same safe haven advantages as gold.