The past year has been a significant one for cryptocurrencies and blockchain. In the face of such extremity and economic meltdowns, cryptocurrencies have proved to be remarkably resilient. Fortunately, the rapid increase in accessibility of global high-speed internet and digitization has created a ripe environment for digital currency. Yet, many remain unaware of the entire cryptocurrency scene in India. As a result of this,
CoinSwitch Kuber
has taken on a mission to educate and empower every Indian on cryptocurrencies and their potential through their learning centre Kuberverse.
Bitcoin – the most popular cryptocurrency, has become a highly valued asset of 2020. Take a close look at the historical prices of Bitcoin; you will see that it has tremendously outperformed itself in value by rising over 500% in six months. Other cryptocurrencies such as Ethereum, Ripple, Dogecoin etc., have also performed well. The crypto market is continuing to witness its longest bull run to date.
With the vaccination scheme going on at full speed, and tremendous social efforts in fighting the coronavirus, we can be cautiously optimistic that its end is near. But, as we learn to fit into the new normal of the post-pandemic world, what role will cryptocurrencies and blockchain technology play?
Here is a list of compilations on how the crypto world would take shape in the coming years, which could probably be the beginning of the post-pandemic lifestyle.
Cryptocurrency regulatory actions
Various emerging markets have already moved to integrate Bitcoin and other cryptocurrencies into their economy. For instance, Costa Rica announced that employees might get legally paid in cryptocurrencies. As a result, its adoption in the country spiked.
The Philippines is another example of championing crypto. Last year, the country’s central bank approved nearly sixteen cryptocurrency exchanges placing the Philippines at the forefront of Southeast Asian countries in terms of booming technology.
Back home in India, there has been noise in the media regarding the regulation of cryptocurrencies now and again. The government is yet to issue an official regulatory stance on this new asset class. Experts believe that a lack of regulation in such a potential fintech area could result in catastrophic black market dealings. The Indian crypto community has been looking forward to a positive law around cryptocurrencies and their transactions. Hopes have risen after our finance minister made it clear that the government will not shut down all the options around cryptocurrency and its technology. Also, few other ministers have shed light on the fact that there are high chances of expecting crypto markets to be regulated in India soon.
Central banks go digital
As a result of the pandemic, people are more inclined towards using digital payment modes than ever. During the second quarter of 2020, digital payments grew by almost 82% by volume in India when the unlock phase rolled out. Such a shift in payment trends, central banks worldwide are looking to introduce
Central Bank Digital Currencies
(CDBC’s) as an alternative payment method in the digital economy.
Unlike cryptos, CBDC’s are a digitized form of a country’s digitized currency created, backed and issued by the monetary authorities. China remains a leader in digital currency and is presently in the process of trialling the digital Yuan.
The CBDC movement is, however, not unique only to China. A survey conducted by the Bank of International Settlements (BIS), Switzerland, revealed that more than 80% of the 66 banks surveyed are involved with experiments on CBDC of their own. The central banks of countries such as Canada, England, the European Union, Japan, Sweden, Switzerland and the United States have issued their first CBDC reports.
ET Spotlight SpecialThe
Reserve Bank of India
has also expressed its interest to launch a CDBC for the Indian Rupee. The RBI Governor Shaktikanta Das revealed that the digital rupee project is the central bank’s primary focus. While an official date on the launch of digital currency is yet to be declared, RBI is seriously considering the sovereign digital currency system.
The CBDC aims to bring the best of both worlds – the secure digital payment system of cryptocurrencies and the centralized and regulated circulation of money in the traditional system.
An active rise in economic activities
Considering that the asset was introduced only a decade ago, the rate at which it is rapidly growing is ground-breaking. There is already a whole system, and industries build around cryptocurrencies globally. Many industrial investors have plunged into cryptocurrencies seeking shelter against inflation in the traditional economy. Even banks that had previously refused to talk about cryptocurrencies are now setting up shop to provide cryptocurrency services to their clients.
We live in a world where more than two-thirds of the globe lacks the essential infrastructure for banking services that enable people to get loans, build savings, etc. It could lead to dangerous lending practices with high rates of interest. With cryptocurrency in the picture, the finances of such places can become more stable. Its ease of use and high volatility presents several opportunities for the less privileged to build wealth.
Apps and platforms like
CoinSwitch Kuber
that make crypto transactions extremely simple can reach rural India and bring them on par with a broader platform. The decentralized nature of cryptocurrencies also enables low-cost cross border transactions. Thus, facilitating a revolution in the financial system, which could leave us more empowered, connected and enabled.
As we hope that the COVID crisis fades into the background, it is thrilling to think of what crypto can disrupt as an asset class and a payment system globally. It would be naive to believe that cryptocurrency will not face another crisis – it will most certainly meet many. But it has proven its resilience through what we could call ‘the greatest crisis of the century, giving us hope that cryptocurrencies can weather any storm and make the most of what the ‘new normal’ may be.
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