Paytm, the pioneer of digital payments in India has announced plans to consider offering Bitcoin services if authorities in the country remove the regulatory uncertainty concerning the same. In India, cryptocurrencies have not been officially recognized or banned.
Paytm to accept Bitcoin
In an interview with Bloomberg, the Chief Financial Officer (CFO) of Paytm India, Madhur Deora, stated that cryptocurrencies in India were currently running in a “grey area.”
“Bitcoin is still in a regulatory grey area if not a regulatory ban in India. At the moment, Paytm does not do Bitcoin. If it was ever to become fully legal in the country, then clearly there could be offerings we could launch,”
The Central Bank of India had banned cryptocurrency trading in the country before the ban was lifted in March 2020 through a court order. However, the country’s legislations have never been amended to show that cryptocurrencies have been fully legalized.
On the other hand, the Reserve Bank of India remains sceptical of cryptocurrencies because of the risks they pose to financial stability and investors. This regulator has been calling for a ban on cryptocurrencies in the country.
The interest of Paytm in cryptocurrencies comes at a time when the company is looking into having an initial public offering (IPO). The $2.5 billion IPO will be open for public subscriptions, with half of the shares being sold to anchor investors. The IPO is expected to debut in mid-November.
Crypto adoption in India
Despite the lack of crypt legalization in India, the rate of adoption in the country continues to be high, as evidenced by a recent report from Chainalysis. The report from the analytics firm stated that India ranked as the second country in the Global Crypto Adoption Index.
The report also shows that 42% of the entire crypto transactions in India were large and mostly affiliated with professional or institutional investors. These transactions came in at an average of more than $10 million.
Another report also shows that the majority of Indians who own cryptocurrencies are between 21 to 35 years and live in city regions. This is similar to what has been happening globally, where the young population is more attracted to cryptocurrencies than the elderly.
India is also ranking higher than other countries in the Asian region regarding the decentralized finance (DeFi) market. Its DeFi market share stands at around 59%, compared to the other countries in the region, such as Pakistan and Vietnam, whose DeFi market share comes in at 33% and 47%, respectively.
Moreover, legislatures in India are also working on a bill that seeks to introduce taxes to cryptocurrency transactions. This trend has been happening in many countries, and with the growing rate of crypto adoption, Indians generate major gains from their cryptocurrency holdings. However, this bill is yet to be passed, and the amount of taxes charged is yet to be determined.
Meanwhile, the Reserve Bank of India (RBI) is also looking into a central bank digital currency (CBDC). A digital currency for the country is expected to be launched before the end of 2021, making it one of the Asian countries looking at having its own digital currencies. With many investors in the country warming up to crypto, a CBDC could see high adoption.