2021 Year in Review | Defining moments in India’s crypto saga this year

India has a weird relationship with cryptocurrencies. The government was twice set to introduce a crypto bill seeking to ban “all private cryptocurrencies” this year before backing out. Meanwhile, demand for these digital assets has exploded across the country amid the pandemic, and especially in 2021.

India’s crypto market grew 641% from July 2020 to June 2021, helping turn a region spanning central and southern Asia and Oceania into one of the world’s fastest-growing cryptocurrency markets,
according to a Chainalysis report from October.

Let’s take a look at some of the defining moments in India’s crypto space in 2021.

■
The crypto bill, take 1: In January, a Lok Sabha bulletin said the government would
introduce a bill in the budget session of Parliament that would ban “all private cryptocurrencies” and set up a framework to create an official digital currency to be issued by the Reserve Bank of India. But in the end, the bill is not tabled.

■
Don’t ban, regulate: In March, cryptocurrency players represented by industry body Internet and Mobile Association of India (IAMAI) appealed to the government not to ban cryptocurrencies, proposing instead
to develop mechanisms to regulate the ecosystem. The body reasoned that cryptocurrency has been generating jobs across a variety of functions such as legal, compliance, technology, marketing, business development, finance, both in India and abroad.

■
Polygon among top 20 crypto tokens: In May, the crypto token Polygon, created by three Indians,
breached $10 billion in market capitalisation. With a market capitalisation of over $19 billion, it was among the top 20 crypto tokens globally at the time, according to Coinmarketcap.com.

■
Dogecoin mania: In May, Dogecoin mania
reached Indian cryptocurrency exchanges. They witnessed record-breaking trading volumes of Dogecoin and a massive surge in traffic. Binance-owned WazirX’s Doge/INR trading slowed its entire system.

■
Crypto adoption: In August, India was
ranked second in terms of crypto adoption amid a bull run in cryptocurrency assets globally, a report by blockchain data platform Chainalysis showed. India was second only to Vietnam in the study, which ranked countries according to the total cryptocurrency received, the amount of cryptocurrency moved in transactions under $10,000, and P2P trade volume, all weighted for purchasing power parity (PPP) per capita.

■
India’s first crypto unicorn: Also in August, India got its first crypto unicorn after CoinDCX
raised $90 million in a Series C round, led by Facebook cofounder Eduardo Saverin’s B Capital.

■ A second soon follows: In October, CoinSwitch Kuber, a cryptocurrency platform for retail traders, became a unicorn after it
raised $260 million, the largest funding round by any crypto company in India. The fundraising was co-led by Silicon Valley-based venture fund Andreessen Horowitz and Coinbase Ventures, the corporate venture arm of Nasdaq-listed Coinbase Inc.

■
World Cup ad blitz: Indian cryptocurrency exchanges
collectively spent more than Rs 50 crore during the ICC T20 World Cup in October and November. Data showed that cryptocurrency exchange CoinDCX advertised seven times per match on every channel during the tournament, spending a total of Rs 40 crore on sponsorship on Star Sports. Rival CoinSwitch Kuber focused on Star’s video streaming service Disney+Hotstar during the World Cup.

■
Stakeholders meet RBI for the first time: In November, the Reserve Bank of India
met crypto players meet for the first time to discuss grey areas. The meeting called by the RBI was attended by senior central bank officials, three exchanges, a crypto broker and the industry body Indiatech.org, which had prepared a white paper on cryptocurrencies.

■
Crypto bill, take 2: In November, the government once again appeared likely to
introduce a bill on cryptocurrencies during the winter session of Parliament beginning November 29, amid concerns over such currencies being allegedly used for luring investors with misleading claims and for funding terror activities.

■
Crypto bill skips Winter session: But the bill was delayed again as the government was reportedly
considering changes to the proposed framework. The issues being debated included the need for wider consultation and seeking comments from the public, and whether the central bank digital currency (CBDC) to be introduced by the RBI should be a part of this bill or dealt with under the RBI Act.

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