Bitcoin and Private Cryptocurrencies
Since its public launch in 2009, the cryptocurrency Bitcoin has raised dramatically its value as of November 2021 one Bitcoin sells for more than $68,000 which is ATH. Bitcoin is not the only cryptocurrency out there but it is the most well-known among over 6000 cryptocurrencies.
Cryptocurrency enthusiasts believe that unlike the Dollar or Rupee and other fiat currency issued by the central bank, the limited supply of private cryptocurrencies makes them more valuable. Many even expect a private cryptocurrency to replace fiat currency at some point in the future.
Bitcoin and other private cryptocurrencies have been growing rapidly in India over the last few years. According to a report over 10 crores of Indian own cryptocurrency, making India the country with the largest number of Bitcoin holders in the world.
In 2018 RBI ban banks and other regulated financial entities from dealing with clients who handed private cryptocurrencies like Bitcoin, and Ethereum. However, the Supreme Court in 2020 overturned the RBI orders and following this trading volume in popular crypto exchange platforms such as WazirX grow multiple within weeks. Other popular Indian platforms that have emerged to facilitate trading in cryptocurrency include CoinSwitch Kuber, ZebPay, CoinDCX, and BuyUcoin.
CoinSwitch Kuber and CoinDCX have managed to achieve unicorn status with their valuation crossing the 1 Billion US dollar milestone recently. Despite regularities uncertainties, these companies are confident that India is a vibrant market for cryptocurrencies because they see huge potential among the youth population.
Check the list of leading crypto exchanges here.
Bitcoin Future in India
Bitcoin enthusiasts saw a rise in the price as the validation of their belief that private cryptocurrencies are the viable alternative to fiat currencies. Bitcoin statistics however argue that scarcity alone is not a sufficient condition for an asset to be widely accepted as the money they see a meteoric rise in the price of Bitcoin as driven by speculative mania rather than fundamental value.
Future of Cryptocurrency in India
The biggest threat to private cryptocurrency going forward comes from the government. The power that government has over the influence of money gives them the ability to manage budget depletion and aggregate demand in the economy. Such privilege would seem to exist in a world where private currencies actively compete against fiat currency.
So, it is highly unlikely that the government will allow private cryptocurrencies to flourish as an alternative money. In India, it should be noted that in 2018 supreme court does not put an end to the primary uncertainty over the legal status of private cryptocurrencies, the center may well pass a new Law that either completely Ban or heavily restrict private currencies.
China has already deemed all private cryptocurrencies illegal and banned them. It soon plans to issue a central bank currency that is based on the same blockchain technology on which private cryptocurrencies work. More governments may adopt the same approach in the coming years.