India's Bitcoin industry is booming and is catching up with China

Bitcoin is gaining a lot of traction in India, and to better understand the reasons behind this growing trend, we spoke to Sunny Ray, co-founder of Indian Bitcoin exchange UnoCoin.

Bitcoin is becoming mainstream in India

The center of gravity for Bitcoin has started to shift away from China, and it is now starting to gain traction in other countries, such as Japan and South Korea.

Now, Bitcoin is showing increasing signs of adoption in India, a country deeply affected by the demonetization policy.

The Times of India's front page story yesterday was all about Bitcoin, with the publication telling the story of a man who exchanged his Bitcoins for extra lives in an online game and who apparently regretted his actions.

The report also provides some facts about Bitcoin, its price, and its regulatory status. It also mentions an interdisciplinary committee to evaluate the current state of global regulation and legal institutions.

The report mentioned:

“India’s finance ministry has set up a committee that will look at regulatory frameworks for bitcoin globally and recommend steps for India to take.”

Sunny Ray, co-founder of Unocoin, India’s most popular Bitcoin exchange, recently noted:

“It took Unocoin 2 years and 10 months to get 100,000 users, but it took only 6 months to grow from 100,000 to 200,000.”

Why is Bitcoin booming in India?

In November 2016, Bitcoin gained a lot of attention after the Indian government abolished the highest denomination banknotes.

However, a lot has changed since then. Sunny Ray explained the reasons for the growing popularity of Bitcoin in the country:

“We think this has less to do with demonetization and more to do with the potential benefits of Bitcoin. Its applications range from: store of value as the number one application (digital gold), second is inward remittances (no need to wait 4 days and 10% transaction fees), p2p payments, online shopping (mobile top-ups, etc.)…”

Unocoin is not the only one seeing a growing trend for Bitcoin in India.

The volume on the p2p trading platform LocalBitcoins also shows this growth trend.

Indian government is studying Bitcoin

Earlier this month, the Indian government set up a multidisciplinary committee comprising different agencies including the country's central bank and the home ministry.

The main functions of the committee are to:

1. Take stock of the current status of virtual currencies in India and other countries;

2. Review the existing global regulatory and legal structure regarding virtual currencies;

3. Provide recommendations for virtual currency transactions, including consumer protection, money laundering and other issues;

4. Check any other matters related to virtual currencies;

The committee is expected to publish a report on its findings in July this year.

While it’s unclear what impact the committee will have, Ray hopes the organization’s creation will help citizens better understand virtual currencies, their benefits, and the risks associated with them.

Ray told reporters:

"Our only hope is to educate the public and we are working with Ishith Desai & Associates, the best law firm in the country. All we can do is try. The fact that some journalists in India are writing some sensational articles is not helpful."

According to Ray, the largest self-regulatory body in India is the Digital Asset and Blockchain Foundation of India (DABFI), which is made up of Indian bitcoin startups such as Unocoin, zebpay, coinsecure and searchtrade.

The organization will focus on creating standard guidelines for blockchain asset transactions, KYC/AML and STR regulations, while working with regulators to popularize the benefits and risks of cryptocurrencies such as Bitcoin and create an environment that can incentivize blockchain companies. In addition, DABFI will also publish reports on cryptocurrencies and blockchain technology.