Legitimacy problem of Indian crypto market deepens

Significance

From an average closing value of INR30.6mn (around USD 374,000) in February 2022, the digital coin's value fell to an average of INR16.38mn by January 2023. This slump reflects the state of all such cryptocurrency tokens. It has also pushed players advocating cryptocurrencies to seek support from the government in the budget for fiscal year 2023/24 (April-March).

Impacts

• India’s central bank digital currency project is advancing slowly, but once introduced, it will steer some users away from cryptos.
• Government scrutiny of corporate governance at crypto firms will intensify within and outside India.
• The failure of the crypto industry locally and globally to curb illicit activity hinders the mainstreaming of the industry.
• India will seek to align its crypto policy with that of other G20 economies, particularly the EU and the United States.