At a time when India has churned out two unicorns in the cryptocurrency vertical and the sector has received nearly half-a-billion dollar investment this year, industry leaders are bullish on the world’s second largest internet market.
China’s recent ban on the virtual tokens is not going to have a significant impact, as per Kunal Nandwani, CEO and co-founder, uTrade Technology. “I see adoption of crypto as the way forward and there is need for governments to get comfortable with cryptocurrency as an asset class which has seen a massive growth since past one year.”
Kunal was part of a panel which discussed the evolution of crytocurrencies during the 19th edition of the India Today Conclave on Saturday. The theme of the panel discussion was “Hydra Heads: The roller-coaster world of cryptocurrencies. And what should India do about it.”
The panelists, while trying to demystify the buzz around virtual money, emphasised that in addition to the rising investments in the digital assets, there is a need to create awareness around the same for better regulations as well as mass adoption. The Indian government is currently studying various aspects of the cryptocurrency regulations bill, which as per sources, has now been forwarded to the Cabinet before introduction of a crypto law in the country.
India was earlier contemplating banning cryptocurrencies as proposed by a finance ministry appointed committee and the Reserve Bank of India.
Sumit Gupta, CEO and co-founder, CoinDCX said that banning cryptocurrencies can do more harm than good and the need of the hour is to engage with the government and masses on this evolving asset.
“In fact, harnessing the blockchain technology in sectors such as banking and financial insurance industry, fintech, etc. will also attract billions of dollars of investments into India. However, a regulatory grey zone around cryptocurrency is certainly blocking our opportunities,” Gupta noted.
He added that understanding cryptocurrency as an asset class which stores value will be integral, especially for those interested in putting their money into digital assets. “There is an old investment principle — Don’t put all your eggs in the same basket, which holds true for cryptocurrency too. Diversification of investment portfolio is important and cryptocurrencies can be a part of the same,” the CoinDCX CEO stated.
According to Kunal, Bitcoin and other digital tokens could be the solution to the challenges faced through traditional methods of money transfer, especially when it comes to cross-border asset transfers. People have opened up to asset classes lately. In US alone, there were $10 trillion investments in various assets classes like gold, ETFs, stocks etc. Cryptocurrency was one of them, he said.
The industry stalwarts likened the current hype around cryptocurrency to that of dotcom bubble in 1990s and asked the investors to be cautiously optimistic while putting their money into the same.
With regards to the mega-risks associated with virtual tokens, Ashish Singhal, co-founder and CEO of CoinSwitch Kuber, another crypto unicorn, stated that the concept of decentralised finance (Defiat) currency like bitcoin, etc. is completely democratic in nature where nobody owns the asset and each investment is secure.
“Besides, understanding the blockchain technology, one also needs to choose the right kind of platform which is secure and trustworthy . We do know there are risks involved, but so are the rewards associated with the crypto,” he said.
The trust deficit, which especially some governments have with respect to Bitcoin and other virtual currencies, will dissolve with understanding the blockchain technology, which is a software digitised with tokens, as per Sanjay Mehta, Founder and Partner 100X.VC.
“It is completely decentralised and still functions like a bank,” Mehta said. From an investor’s perspective, one needs to perform due diligence and evaluate the risks to avoid skepticism, Mehta said. “As is the case with any investment option, one needs to learn about the cryptos in order to invest their hard-earned money into the same,” the investor said.