InvestorQ : India has recorded the highest number of crypto holders. How is crypto trading running in India when it is not a legal tender?
Sakshi Malhotra made post

India has recorded the highest number of crypto holders. How is crypto trading running in India when it is not a legal tender?

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Aswini Chikkodi answered.
2 months ago
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In 2018, the RBI almost banned cryptocurrency trading in India, deeming it as a way that can be used to fund illicit activities. The idea was not to ban the trading but to force the banks to pull their support to crypto platforms. In financial terms, a Demat account without a trading account. It was at a time when Indians were not that familiar with cryptocurrencies, and there was no literature, marketing, and goodwill around the trading and profit potential.

The pullout was followed by numerous lawsuits against RBI’s decisions. It was argued that RBI can’t ban but only regulate cryptocurrency trading. After years of waiting, the Supreme Court favoured crypto trading, resulting in RBI asking banks not to use its 2018 circular warning customers against crypto trading. The government has also softened its stance against crypto trading, allowing numerous unicorn crypto startups to pop up.

Awaiting what the government would decide, crypto platforms are onboarding customers in high volumes. The KYC process is followed by bank account verification. Once it happens, the platforms allow investors to choose a payment method. For some, it is restricted to digital wallets; however, some nationalized and private banks have started to give direct transaction support to crypto platforms.

With no restrictions on the investment amount and the high volatility, Indian investors have turned towards crypto after the financial repercussions of the COVID pandemic. The promise of substantial price movement is interesting to Indians, especially youth, who want to make quick profits without holding their investments for a long time.

As RBI talks about launching its own digital currency and with the immense funding crypto platforms are raising, there is no doubt that the crypto holders will only rise with time in India until a decision is presented.


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