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Legalization of Cryptocurrency and Its Impact on Indian Economy

By Sthitaprajnya Panigrahi

Although cryptocurrency in India is not an unfamiliar word, lately it has again grabbed the attention of everyone after Supreme Court legalized it in a recent verdict. Lifting the banishment from cryptocurrency exchange and transactions, this decision of the Supreme Court will mark the growth of cryptocurrency in India. The cryptocurrency and blockchain were banned earlier due to the fear of circulation of black money throughout the country as the cryptocurrency domain was not under government authorization. A person using it can be anonymous and chose not to live any digital footprints behind. Bringing much relief to the stakeholders as well as organizations that have invested in cryptocurrency, the historic decision was welcomed by industry stakeholders who started cryptocurrency trading movement #IndiaWantsCrypto in microblogging sites. While there are many speculations related to the impact of bitcoin on Indian economy, it is expected to bring a positive outcome by boosting the digital currency and online payment sector.

To analyze more about the impact of cryptocurrency on economy of India, this article focuses on how the legalization of cryptocurrency will affect Indian economy along with the various scope of cryptocurrency in India.

  1. More Inflow of Capital for P2P Companies: The Peer-to-Peer companies will be specifically be benefitted from this move, as the online transactions to individuals and organizations via online payment will be much easier. This will significantly favor the investment by foreign ventures into Indian startups and will result in more inflow of capital.
  2. Low Cost of Transactions: The cryptocurrency will not require the existence of any brick and mortal platform as the whole transaction will be done via the internet only. Apart from that as it will be managed and handled by every individual, it will not require any wages, rents, and bills to be provided to the employees. These practices will cost much lower than handling finances through banks or other financial institutions.
  3. Growth of Entrepreneurs: The great benefit that the Indian economy can extract from the legalization of cryptocurrency is the escalation of the number of entrepreneurs. Cryptocurrency and blockchain technology will help the SMEs get a firm grasp over their financial coverage by assisting in smooth transactions, digital wallets, online investments, payments and purchases, and many other financial liberties.
  4. More Job Creation: The implementation of cryptocurrency in the Indian economy will enhance the frequency of job availability. In the case of India where the job need is dire, it might take a few years to show impact but it is affirmative that it will bring noteworthy changes in the Indian job market. The cryptocurrency technology is expected to take over the digitization of money to a new level thus creating more business opportunities as well as crypto jobs.
  5. Boost India’s virtual Currency Industry: There will be transparency in money transactions as it will be automated and monitored by the digitized ledger. It will also prevent the involvement of any particular person or organization in this currency which will reduce the possibilities of corruption and fraud.

India is a developing country and thus has a large economy to manage. Although very few economists have managed to express their views on the legalization of cryptocurrency in India, it is expected to bring more positive impacts on our economy. Most of the new entrepreneurs and investors have expressed their happiness as it will allow widening their business horizon. However, how things take a turn is yet to be witnessed.

 

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