- India has the highest number of crypto owners in the world at 10.07 crore
- India’s crypto investors part of larger, more sophisticated organisations
- Several concerns, ranging from how to define crypto, who will regulate it and how to prevent misleading ads about crypto, remain to be resolved
Mumbai: 2021 was the year when cryptocurrency truly went mainstream. From dominating conversations for Gen Z to prominent ads plastered across media, to debates in the Winter Session of the Parliament— everyone has been talking about crypto. As we end the year, the question of regulation of the space still remains, but there is little doubt over the fact that the crypto craze is here to stay.
The Central government is soon expected to define and regulate the hitherto unregulated space as per the description of its draft crypto bill. The bill will define and categorise cryptocurrencies based on their three use cases: payments, investment, and utility. Yet, with the Parliament Session having concluded without the bill getting tabled, it looks like regulatory uncertainty over the digital currency will likely spill into 2022.
Will regulatory clarity over how we tax, define and treat cryptocurrencies emerge in 2022? “Almost no country worth its name has come to a final conclusion on how to treat crypto assets yet. They’re certainly not legal tender, nor do they perform any of the three functions of a currency. The International Monetary Fund, the World Bank, and most major banking and regulatory authorities in the world have expressed their reservations over crypto. It is better if the government thinks things through and then comes out with a well-thought-out law. It is better to proceed slowly, but is also imperative that we come up with a solution before young Indians burn their fingers dabbling in risky crypto investments. First and foremost, we must decide if it is an asset or a liability. I expect to see a great deal of volatility and several wiser and poorer investors at the end of it all,” reasons Mythili Bhusnurmath, Consulting Editor, ET NOW during a panel discussion on ET NOW.
Are crypto investors and exchanges entering the new year with trepidation or do they remain bullish? “2022 is going to extend all the work that was done in 2021, with regulations being right at the top of the priority list. India, as well as the world, will go much deeper into the regulatory environment around crypto. A lot more countries will get into central bank digital currency (CBDC). 2022 will see countries racing to launch CBDCs. We’ll see some really good products emerging in the Metaverse space, too. And NFTs, meanwhile, are going to try to find a secondary market. This year is going to be really crucial for cryptos to go to the next level in terms of adoption and stability. There are about 150 million people around the world today who are into crypto. If we see the same kind of tailwinds that we saw in 2021, that number will rise to 300-400 million people in the coming year,” concludes Nischal Shetty, Founder & CEO, WazirX.
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