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Last year was not the best one for the digital asset industry in India, which, besides regulatory setbacks, had also decreased interest as prices significantly lowered. Now, traders and exchanges have their hopes high this year, hoping there will be clarity on the legal and regulatory sides. Crypto in India is associated mainly with backlash from the official Government and loads of interest from the ordinary people who see new payment solutions as the way forward.
There are mixed feelings about this issue within the government and representatives often come up with contradicting statements. For example, at the beginning of December of 2018, previous Indian government panel meetings had reportedly suggested a complete ban on cryptocurrencies in the country, stating that “any kind of dealing in such currencies should be treated as lsquo;illegal’.
Well, in late December, we heard a completely different story. A governmental committee in India has reportedly suggested that cryptocurrencies be legalized in the country, English-language local media TheNewIndianExpress (TNIE) reported. According to the article, a senior official who reportedly attended the panel’s meetings on digital assets said: “There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders.”
Overall, while crypto is used by many in India, there is still no official position or law stating whether crypto is legal in the country or not.
Despite unclear regulations and restrictions, large businesses and banks are still embracing crypto mdash; or at least some of the technology that is behind it mdash; as a more reliable way to reconcile accounts, keep proper records, make payments, and manage internal funds. According to a report in the India Times, a number of Indian corporations are currently trialling blockchain tech as a means of record keeping.
Hindustan Unilever Ltd (HUL), Reliance Industries Ltd (RIL), HDFC Bank and ABG Shipyard are among those companies running such pilots for internal treasury management, finance functions trading and record keeping. Unilever is a global consumer goods company, Reliance is the biggest holding in India while ABG is a major shipbuilding company.
The World Bank in its latest report revealed that India has received the largest amount in remittance last year with $80 billion being sent from citizens working abroad. At the same time, users paid more than $4 billion in cuts to payment services. That is a lot of money lost to a middleman.
The rapid speed at which the digital economy is developing promises to change the dynamics of the remittance industry as a whole, in India and abroad. Blockchain has opened alternative payment corridors where money can be sent as quickly as an email and without paying commissions. In times when Indians lose on average 7-8% of their money in fees to a middleman, the use of blockchain could reduce the spending to as minimum as 1% or even less.
Despite the fact that the government makes a lot of steps against crypto industry, there are even cases when police warned the public against investing in digital assets, Indians are very curious about new payment possibilities and represent a big market for crypto projects.
With the hope of having a government on its side – enthusiasts, projects and businesses alike continue digging deeper into digital asset industry and learning more about it. 2019 can be a year when crypto will get more accepted and the adoption rate will increase further in the biggest democracy of the world.
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