Bitcoin is drawing interest as an investment and store of value in India. Companies and high-net-worth individuals especially have begun looking to the cryptocurrency as a possible asset.
Sandeep Goenka, CEO of India-based Bitcoin wallet Zebpay, explained to Business Standard that Bitcoin’s deflationary nature makes it appealing as an asset class: “one can park money in the
wallet in the hope that the value of bitcoins would go up.” Zebpay is one of several major players on the Indian Bitcoin scene; others include wallet Unocoin and trading platform Coinsecure.
Goenka explained that Zebpay is currently seeing growth of 3,000-4,000 users per month. Bitcoin is still early enough in its development that it is a potentially promising investment but advanced enough that it offers reasonable liquidity and is starting to gain wider awareness. Therefore, it may be at a stage where it is especially attractive as an asset for larger entities like companies and high-net-worth individuals in India and elsewhere.
Although Bitcoin is currently unregulated in India, the Reserve Bank of India (RBI) has sent mixed signals about its stance on Bitcoin. At the end of 2014, the RBI’s Governor described Bitcoin as “fascinating” and said that “down the line, we will be moving towards primarily a cashless society and we’ll have some currencies like this which will be at work.”
More recently, however, the RBI has expressed concern regarding the lack of restrictions on Bitcoin transactions. In August, the RBI’s Deputy Governor gave a speech at Indian banking conference FIBAC in which he emphasized that “cryptocurrencies have been widely suspected to finance criminal activities.” He said that while Bitcoin and similar innovations “have the potential to be disruptive,” they “may not be of so desirable, or may be of questionable, relevance and merit.”
Since then, however, over half a year has passed with little incident, and the tide may now be turning again with investors and high-net-worth individuals increasingly considering Bitcoin as a store of value. With growing interest in Bitcoin and a central bank that seems unsure whether to embrace or crack down on cryptocurrencies, time will tell where India’s Bitcoin industry is headed.
Images from Shutterstock and Wikipedia/Nichalp.