On July 13, 2020, reports confirmed that the trading volume of cryptocurrency in India has risen by about 400% in the months following the outbreak of Covid-19.
The boom in crypto trading comes after the Supreme Court of India recently suppressed the banking restriction that the Reserve Bank of India (RBI) imposed on the crypto industry in April 2018.
Since then, Mumbai-based WazirX exchange, which was acquired by global exchange Binance in November last year, has registered rising volumes of up to 270% in March and April, along with a surge in new sign-ups and active users, according to its founder and CEO Nischal Shetty.
The new surge in trading volumes has now led Ajeet Khurana, the former head of ZedPay exchange, to presume that crypto has become significant enough to be considered a valid asset class and commercial activity in India.
Cryptocurrencies Make a Solid Comeback in India
The Covid-19 pandemic and resultant lockdowns have crippled many sectors of the economy and pushed folks to stay at home. This has seemingly resulted in people spending more time on online crypto exchanges, and many of them are trading more.
“I’m seeing more people wanting to spend their time under lockdown in learning and understanding what crypto is, how it works, what are the use cases of various crypto tokens, etc.,” Nischal Shetty told reporters in May.
Other than WazirX, other top crypto exchanges in India are seeing record-breaking volumes on their trading platforms.
For instance, Zebpay has registered record volumes on their platform and have been forced to add staff and automation to handle the KYC load and new deposits.
The exchange’s new chief marketing officer Vikram Rangala said that the extended lockdown has led to more folks learning about crypto trading as they look for new avenues of making money online.
Similarly, Unocoin’s CEO, Sathvik Vishwanath, noted that both the Covid-19 crisis and the regulatory clarity in India came about at the same time in India, resulting in a renewed appetite for crypto in the country.
Vishwanath confirmed that the current trading volumes on his exchange are ten times more than before these two events.
Regulatory Hurdles Remain
The Indian market holds great potential and importance for the crypto-economy future, as highlighted by trading volumes having been growing by leaps and bounds across many exchanges in the country.
However, a lack of clear regulations from the RBI and the anonymous and speculative nature of cryptocurrencies have led to several local banks remaining hesitant on accepting crypto.
Moreover, a recent report revealed that the Indian government is looking to introduce a law to ban cryptocurrencies. Simultaneously, the RBI has expressed reservations continuously to allow digital assets in the country due to scams and their propensity to facilitate illicit activity.
That said, the high demand over the past few months has highlighted that Indian citizens have growing enthusiasm for digital currencies.