According to a recent report, Indian crypto holders could potentially cross the 150 million mark this year. Despite the government’s historically negative attitude toward the sector, India has experienced a significant rise in crypto investors over the years.
Notably, if India crosses the 150 million mark, it would account for more than half the global crypto users’ market share. Sources have cited the following factors to be responsible for increasing the crypto user base in India:
- Rise of Fintech: One of the primary reasons for the growth of cryptocurrencies in India is the increasing number of fintech firms. These companies have been increasingly using blockchain technology to design and offer innovative products and services to clients. Additionally, fintech companies leverage cryptocurrencies to enable efficiency in transactions and micropayments. As fintech expands in India, cryptocurrencies will likely play an increasingly important role in the financial market.
- Adoption of mobile technology: India is home to the world’s second-largest smartphone market, with over 1 billion smartphone users. This has created a large user base comfortable with digital payments and has the technology necessary to invest in cryptocurrencies. Furthermore, the rise of mobile wallets in India has made it easier for people to transact in cryptocurrencies.
- The increasing popularity of digital payments: The increasing popularity of digital payments is also driving the growth of cryptocurrencies in India. The government’s push toward a cashless economy has led to a surge in digital payments. Many people use mobile wallets and digital payment platforms to pay for goods and services. Cryptocurrencies offer a secure and convenient digital transaction, contributing to their growing popularity.
In recent years, the cryptocurrency market has gained significant traction and the asset is popularly being used for transactions and as a store of value. It is expected to account for around $43 billion in transactions globally, marking a 24% increase from $34.3 billion last year.
Considering this, over half of that value will come from the United States, the world’s largest crypto market. However, taking into account the setbacks, crypto ownership in the US is still far behind India. The research claims:
India is expected to hit over 156 million crypto users in 2023, or five times more than the United States.
Reportedly, the country’s cryptocurrency market attracted significant attention during the COVID-19 pandemic, mostly due to poor financial infrastructure. The number of crypto users in the region surged by 760% between 2017 and 2022 taking the count to 134 million.
While the statistics expect India to have the largest crypto user base by the end of this year, another survey reported India to be holding second place already. The US currently takes the first spot followed by India which has 27 million owners and Pakistan in third place with 26 million owners. Nigeria and Vietnam take fourth and fifth spots with 22 million and 20 million owners respectively.
However, it is important to note that the increasing interest of investors from India is not supported by the government. The Indian government has been historically skeptical of the sector. In 2018, the Reserve Bank of India (RBI) issued a circular prohibiting banks from dealing with cryptocurrencies. However, the highest judiciary i.e. the Supreme Court removed the ban in March 2020, reigniting the interest in cryptocurrencies.
Lately, Indian authorities banned crypto advertising and sponsorships in the local women’s cricket league. Additionally, the Indian crypto market and the government doesn’t see eye to eye on a lot of issues including taxes. The sector was also left disappointed by the Indian budget this year as it failed to engage with the sector and its demands. Several firms have also accused the government and its policies of forcing companies to move abroad.
While the government is yet to regulate the sector, there are signs that it is becoming more open to the sector. The country has marked crypto regulations as its priority for the G20 meeting that it is hosting this year. The outcome of the G20 meeting is going to play a pivotal role in the future of cryptocurrencies in India.