Youth in emerging economies drive adoption of crypto

Even as the government is yet to spell out a clear stance regarding cryptocurrency, the idea of digital currency is gaining traction among investors, especially younger individuals. According to a recent report, 30 per cent of a 42,000-strong sample group in India owns cryptocurrencies.

India also figures among the top five nations when it comes to the adoption of cryptocurrency, reinforcing its popularity as a modern-day asset class.

As per the report, youngsters, aged between 18 and 34, in developing nations are leading the charge in terms of adoption of cryptocurrencies in their countries. It adds that remittances may also be a driver for adoption in the next batch of countries, with Indonesia, India, Malaysia and the Philippines all showing ownership rates of around 30 per cent. As far as adoption rates are concerned, India is trailing only behind Indonesia, where the purchase and sale of cryptocurrency has been legalised since 2019, . Little wonder that the Coinbase-backed CoinDCX became the country’s first unicorn start-up in the cryptocurrency space recently.

Ironically, an economic heavyweight like the US is yet to take a lead in this regard, despite the backing of giants such as Tesla’s founder-CEO Elon Musk, who has been rooting for it extensively. In fact, any tweet of his has directly impacted the surge and dip in the rate of Bitcoin, that has been hovering at $45,431. Bitcoin, the world’s first decentralised cryptocurrency – a type of digital asset that uses public-key cryptography to record, sign and send transactions over the Bitcoin blockchain, has recorded an all-time high of $64,829.

In India, Bitcoin remains the most popular coin to own (16%), followed by Ripple (8%), Ethereum (6%) and Bitcoin Cash (6%). The report also shows that crypto ownership is more prevalent among Indian men (32%) than women (23%). Interestingly, young adults are the most likely to own cryptocurrency with 32% of those aged 18-24 having invested in cryptocurrency.

Of late, small towns have also been witnessing an uptake in cryptocurrency adoption in India. The country’s largest crypto exchange by trading volumes, WazirX, recently reported a 2,648% growth in user sign-ups from tier II and tier III cities in the country. Swelling with 7.3 million users, the exchange has amassed trading values worth over $21.8 billion in 2021 alone.

Regulation-wise, the Centre has been dragging its feet, with Finance Minister Nirmala Sitharaman awaiting approval from the Cabinet on cryptocurrency bill as the proposed legislation has been placed before it. The inter-ministerial panel on cryptocurrency under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions, has already submitted its report. It has recommended that all private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India.

The manner in which the government frames its rules pertaining to cryptocurrency will in many ways determine the future of this asset class in India. Stakeholders are placing their bets on a prudent approach towards crypto on part of the Centre. It could very well offer India the next iteration of the IT boom.

In India, Bitcoin remains the most popular coin to own (16%), followed by Ripple (8%), Ethereum (6%) and Bitcoin Cash (6%)