The average daily volume of cryptocurrency transactions on major Indian exchanges has increased by almost 500% since March 2020, when the Supreme Court overturned the April 2018 circular of the Reserve Bank of India (RBI). While the Supreme Court order removed restrictions on banks working with crypto companies, the COVID-19 pandemic has also encouraged investors to start investing in cryptocurrencies.
According to data from CoinGecko, the average daily volume traded on India’s four major cryptocurrency exchanges was over $ 22.4 million as of December 16, 2020, up from just under $ 4.5 million as of December 16, 2020. March 1, 2020. Exchanges include WazirX, ZebPay, CoinDCX, and BitBNS. Data for other exchanges was not available on CoinGecko.
According to Paxful research, India is the second largest Bitcoin country in Asia, after China, and the sixth in the world, after the United States, Nigeria, China, Canada and the United Kingdom. Between January 1 and November 14, 2020, nearly $ 74.92 million worth of Bitcoins were traded on Paxful by Indian investors, which is 347% more than the previous year, he said.
Factors Driving Crypto Adoption in India
Following the Supreme Court order, the majority of Indian cryptocurrency exchanges changed their business model from a Peer-2-Peer model to a direct model, in which Indian crypto investors could purchase coins. cryptocurrencies directly through their debit or credit cards and their bank. accounts. The fact that banks are now open to doing business with national stock exchanges has brought a sense of confidence to Indian investors.
Also, since neither the RBI nor the government introduced any new guidelines or restrictions on crypto investments, Indian banks have started providing various services to national exchanges, such as payment gateways, working capital loans. and other facilities. Some of the major banks including HDFC Bank, Yes Bank, State Bank of India, ICICI Bank, as well as smaller public and private banks are now doing business with Indian crypto exchanges.
A recent CoinDCX survey found that around 54% of cryptocurrency investors in India earn less than 10 lakh per year and around 78% of them already invest in mutual funds and stocks. âAfter the Supreme Court order, we were able to move to the banking model where people could transfer money to our account, which is more secure and efficient than the Peer-2-Peer model. Transaction volumes and user registrations have increased dramatically in recent months following the Supreme Court order and the rise in Bitcoin prices. The good sign is that regulators allow the industry to grow organically, while exchanges ensure that Know-Your-Customer standards are strictly adhered to, âsaid Sumit Gupta, co-founder and CEO of CoinDCX.
âIf we had 100 users signing up daily before March, we are now seeing 800 users signing up daily. We now process around 70-80 crore in transactions daily, âBitBNS CEO Gaurav Dahake told MediaNama. Dahake said the main drivers of increased trade volumes came from the Supreme Court order and the COVID-19 pandemic due to which people who lost their jobs or who witnessed a drop in wages have turned to cryptocurrencies as an alternative option to make money. .