Indians have been waiting for access to encrypted banking services as British financial technology firm Cashaa has teamed up with the United Multi Country Credit Coperative Society in India to create cryptocurrency-focused banking company Unicas, which will initially open 34 branches. in northern India and plans to reach 100 in the coming years.
Given that India’s economy is heavily focused on savings, Unicas will also offer crypto savings accounts that pay interest on deposit cryptocurrencies. This can serve as a catalyst for credit cooperatives in India to enter the market and make the most of this opportunity.
But overall, the Indian cryptocurrency industry has seen tremendous growth in volumes and new customers after the Supreme Court lifted a two-year ban on banks offering cryptocurrency services in March 2020. This was announced by Neshal Shetty, founder of WazirX, the Indian cryptocurrency exchange Cointelegraph:
“The cryptocurrency ecosystem in India has grown significantly since the Supreme Court overturned the ban on banking cryptocurrencies in India. […] A positive decision was immediately followed by a lockout due to the COVID-19 pandemic. This period also gave people more free time. Read about and participate in cryptocurrencies.
Ashu Swami, CTO of Apifiny, a New York-based provider of liquidity and cryptocurrency solutions, attributes this growth to growing evidence that bitcoin (BTC) has become a safe haven and the ease of making domestic transfers to the country using cryptocurrencies. “Senders are realizing that virtual currencies are more efficient,” hence the rise in demand. He added:
“The INR has been very volatile, having dropped more than 80% against the US dollar over the past decade. Gold is extremely difficult to trade and has high transaction costs; real estate is in recession after demonization in 2016; the stock has recorded record highs and is widely believed to be worth fixing at any time. ”
As a result of these factors, according to statistics provided by Apifiny, by 2020, almost all international cryptocurrency exchanges reported a five to tenfold increase in traffic from Indian users. Meanwhile, local crypto exchanges in India reported a tenfold increase in registrations. In 2020, this is 2.5 times the world average growth rate of 400% compared to a year earlier.
Major players enter the Indian market
As Binance acquires WazirX and Bain & Company with CoinDCX funding, and Polaris Capital begins investing in the Indian cryptocurrency market, it is clear that major players have realized the fundamental potential of the Indian cryptocurrency market and have begun to allocate capital to participate. … in this growth.
Even Tata Consultancy Services, an Indian multinational IT consulting company, launched the Quartz Smart solution earlier this year in July, helping financial institutions offer cryptocurrency trading. Shetty believes all of this builds confidence in the industry: “TCS works with large companies as their clients. We expect large financial institutions will likely start experimenting with this in order to fully disclose their crypto offerings to their clients. ”
This indicates that mainstream Indian banks are interested in entering the industry in the same way DBS Bank, the largest commercial and retail bank in Singapore, did: by launching cryptocurrency and custody services. Even PayPal’s announcement that it will begin allowing cryptocurrency payments in 2021 is likely to boost the number of investors in India.
Previously, PayPal did not have a sustainable entry into the Indian market, even with stock-based payments. Technically, the Reserve Bank of India never banned the company from operating in India, but PayPal shut down its services in 2010. According to Swami, this was due to the Indian Know Your Customer standards and licensing regulations, which are extremely burdensome and therefore hinder customer experience. In 2017, PayPal launched a new version for India, but the market was already saturated with local startups. Swami believes encryption could be a new option for PayPal:
“ With the right set of events, such as the Indian government allowing virtual currencies and local startups to slow blockchain adoption (which seems to be the case so far), PayPal may be in a unique position to allow cryptocurrencies that merchants accept to join. PayPal and conquer the market. This time Indian. ”
India’s growing cryptocurrency industry is also being driven by innovators who are developing new products for Indian investors that match their investment-oriented savings behavior, providing them with more profitable returns than traditional asset classes.