India, Vietnam, and Pakistan are all helping to lead the expansion of crypto markets in Central and South Asia. India’s market grew by over 641% last year and Pakistan’s by 711%. India also has a 59% share of activity taking place on decentralized financial platforms (DeFi), while Pakistan has a 33% share.
Entrepreneurship related to cryptocurrencies has increased significantly in the region in 2021. A report by Chainalysis states: “Large institutional transfers of cryptocurrencies worth more than $10 million account for 42% of transactions sent from India-based addresses, compared to 28% for Pakistan and 29% for Vietnam. These figures suggest that India’s crypto investors are part of larger, sophisticated organizations.”
The year 2021 has seen a number of twists and turns for the Indian crypto market. There have been reports on the regulatory front that the country may seek to ban or restrict crypto. However, in recent times, it seems that the Indian government might opt for taxation instead.
If you want to find more details about India’s crypto market and why it increased so much in the last year, download for free our companion app. The Born2Invest business news mobile app keeps its readers up to date with the latest market updates.
Crypto law planned in India
In April 2021, a report by The Legal 500 outlining the legality of cryptocurrencies in India revealed that the Indian government is considering introducing a new law. This is to be called the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
The new bill intends to ban cryptocurrencies in India. However, there are to be certain exemptions to promote the underlying technology and trading of cryptocurrencies. The exemptions are also intended to create a framework for an official digital currency issued by the Reserve Bank of India.
The draft also acknowledges the gray area of crypto laws. In April, the central bank warned the public about the potential abuse of private cryptocurrencies. However, many fear that a complete ban on cryptocurrencies in India could lead to investors trading in uncontrolled markets.
Even with the introduction of a government cryptocurrency, these risks remain. About 1.5 million Indian citizens are believed to have invested in cryptocurrencies. With such a large number of people, it is unlikely that the Indian government will completely ban cryptocurrencies.
Will India be the next country to follow in the footsteps of China, which is currently tightening its grip on cryptocurrencies?
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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