While the RBI has warned people not to invest in cryptocurrency, international digital exchanges seem confident in the future of this new industry. They are betting heavily on emerging markets such as India by allowing users to buy these virtual coins in their local currency. Take Coinbase for example. The US cryptocurrency exchange platform has said it will allow Indian users of its app to buy crypto coins by making payments in Indian rupees. The company has said it will be rolling out this feature soon by adding support for the popular UPI payment system. However, the company does not say which banks it is affiliated with.
The crypto exchanges show this enthusiasm at a time when RBI seemed unenthusiastic about private cryptocurrencies circulating in the market and regulatory concerns were raised in several quarters. Currently, cryptocurrencies are not regulated in India and are growing rapidly. And most banks do not allow Indian customers to use their accounts to buy crypto through UPI. Coinbase has said it is in talks with partners to find a way to allow Indian users to buy crypto with INR.
Digital exchanges see huge growth potential in India, with many young investors entering the market to make a quick buck.
Meanwhile, a bill to regulate the industry is pending in parliament.
RBI Governor Shaktikanta Das has said that cryptocurrency poses a threat to the existing financial system and that it “has no underlying asset, not even a tulip”.