Crypto currency- The Next Trillion Dollar Industry

Cryptocurrency was invented by one Satoshi Nakamoto over a decade ago. On January 3, 2009, Nakamoto brought the Bitcoin network into existence by mining the first block of the ledger. Being one of the safest mode of transaction, cryptocurrency is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend therefore making it reliable. This has resulted in it being used as an alternate currency by various countries around the globe for trading.

A cryptocurrency is a digital currency which is backed by a robust technology called as blockchain. In other words, cryptocurrency is a medium of exchange that exists in the digital world and uses encryption that ensures the security of transactions.Peer-to-peer  encrypted  networks   have  facilitated  global   transactions  in  ways never   thought  to  be   possible  and  cryptocurrencies  have   become  a  popular   investment  option, however, not without risk.When compared to the bank transactions, cryptocurrency transactions are cost efficient, relatively anonymous and with immediate clearing and settlement while electronic cash transactions take time and have geographical limitations. Cryptocurrency arrived in India around 2012 and reached its peak in 2017 with the emergence of multiple cryptocurrency exchange like bitcoin, ethereum, Libra, Monero and many more. Since 2009, over 3,000 cryptocurrencies have been mined and traded with a market capitalization of over $221 billion.

At the outset, it is important to initiate a dialogue with Indian legislators and regulatory bodies and work towards creating a crypto-regulatory framework in India. Due to the decentralized structure of the cryptocurrency, the Reserve Bank of India (RBI) took an over-protectionist stance and imposed a ban on 06.04.2018 which restrained cryptocurrency based activity in India in its entirety. On 04.03.2020, however, the Hon’ble Supreme Court of India in the case of Internet and Mobile Association of India v. Reserve Bank of India, quashed the RBI notification dated 06.04.2018 on the grounds of proportionality and opined that in the absence of any legislative prohibition, the business of dealing in virtual currencies should be treated as a legitimate trade protected under Article 19(1)(g) of the Constitution, which affords a fundamental right to carry on any occupation, trade or business. From India's viewpoint, a significant point for thought is that presentation of Digital rupee as a legitimate delicate might be a state of contention as by method of banning other virtual currency and presentation of Digital Rupee, the government may have monopoly around here. The Hon'ble Supreme Court has noticed this aspect while examining this issue however evaded discussion on it by expressing that such a circumstance has not yet emerged as enactment is still in a bill shape.

However, since the judgment, cryptocurrency-based activity on exchanges immediately shot up. In a short space of time, cryptocurrency exchanges began to spring up within the country. Various new platforms emerged like WazirX, CoinDCX, BtcxIndia, Unocoin, and Coinsecure began offering cryptocurrency exchange and trading services in India.  Apart from these online exchanges, there are also a number of over-the-counter (OTC) crypto shops in the country.Moreover, cryptocurrencies were recently legalized in South Korea and Japan, and Australia.

While the total number of verified virtual currency, users stands at 1.7 million in India, according to Internet and Mobile Association of India, the global market size is pegged at $430 billion. With the proliferation of crypto trading and exchange platforms, the crypto market in India has grown from its modest level in 2012 to what it is today.Cryptocurrency exchanges are seeing a huge number of user registrations. Unocoin says over 1,000 customers are registering daily while WazirX platform is adding 300 users daily.The trading volume of cryptocurrency in India has increased by 400 percent in the last few months during the nationwide lockdown due to the COVID-19 pandemic. The future of cryptocurrency concept is promising, revealing more opportunities to bring positive changes and progress to e-Business and e-Payment sectors. With the rapid progress and improve of technology, cryptocurrency will not stop progressing.

The progressing COVID-19 emergency bringing about plunging investment esteems regarding value, bonds and wares have prompted financial experts searching for resources that could withstand the stoppage activated by lockdown and give them a run for their monies. While some depend on the well being of government bonds, others are purchasing gold. A few financial experts in India have discovered Bitcoin appealing as a way to hedge the risks, enhance their portfolio and maybe make a profit. Further, market experts accept that digital forms of money could stay immaculate by the stoppage began by COVID-19 and may beat other resource classes. One reason is the non-correlated nature of cryptocurrency, which shows that it is not legitimately affected by the financial, international and pandemic like circumstances because of its decentralized nature.

In the current government’s pursuit of a cashless economy backed by the Supreme Court’s judgment setting aside RBI’s ban on cryptocurrency trading implicitly supports innovation and is a major step in the right direction. Mr. Sudhir Mishra, the Managing Partner of the law firm, Trust Legal Advocates & Consultants based in Delhi who have registered various cryptocurrencies originally based from South Korean and Switzerland companies on Indian crypto platforms,says that “Crypto currency is not here to disrupt the existing mechanism, it is here to add value to what has not been created.”