Growth of Bitcoin, Blockchain Development in India: 2017 in Review
In spite of government’s efforts to curb the growth of cryptocurrencies and Blockchain in India, the people of India and the Indian market for cryptocurrencies appear to love them all the more. The year 2017 has been particularly interesting for the growth of cryptocurrencies in India, mainly due to the ‘to the moon’ journey of the Bitcoin missile. Digital currency’s rapid price appreciation has sparked a nationwide interest, with the mainstream Indian media going haywire on cryptocurrency reporting. Media routinely gives both ‘investment’ advice and reiterates ‘cautionary’ warnings from the Indian government at the same time. So, how was the year 2017 for the overall development of cryptocurrencies and Blockchain in India?
The setbacks to Bitcoin and cryptocurrency
The legal response to Bitcoin and cryptocurrencies was mostly negative, with the Reserve Bank of India (RBI) issuing two warning in 2017 itself, first in February and then again in December. RBI cautioned people against buying Bitcoin and other virtual currencies. The Indian Finance Minister also reiterated RBI’s stance, adding that the Indian Government has not lent any legitimacy to Bitcoin.
An online petition started by DABFI, the largest crypto organization in India at that time, asking for legalization of Bitcoin in India could gather only 15,000 signatures. This is a particularly poor showing, given India’s population of 1.2 billion.
In December 2017, even as the year was coming to an end, many major Bitcoin exchanges in India (including at least Unocoin and Coinsecure, as per sources) were raided by the Income Tax Department, which was allegedly seeking information about the functioning of Bitcoin and cryptocurrencies.
High points and mainstream acceptance
One of India’s leading trade associations, ASSOCHAM, held a global summit on Bitcoin and Blockchain in March, describing Bitcoin as a “revolution in the field of supply chain finance.”
Later, in May 2017, the demand for Bitcoin grew exponentially and abruptly, so much so that India’s largest exchanges had to put a limit on Bitcoin purchases due to lack of supply. A month later, in June, Zebpay became the 7th most popular app in the finance categoria on India’s Apple app store, even higher than the apps of many national banks. In October, it was reported that the major Bitcoin exchanges in India were adding more than 200,000 new users every month.
Year of Blockchain
The year began with IDRBT, the research-wing of RBI, India’s apex bank, asking for the ‘digitalization of the India Rupee’ using Blockchain technology. This development was followed by the gathering of all major players in the cryptocurrency and Blockchain industry in India to start a crypto Organization. The so-called “Digital Assets and Blockchain Foundation of India” (DABFI) aims to self-regulate the industry.
In February, State Bank of India, India’s largest bank, took an initiative called ‘Bankchain’ to share data between all Indian Banks using Blockchain technology. In May 2017, Bankchain started providing services to share AML/KYC data across banks. In November, the Bank launched a Blockchain-based KYC system for its own verification purposes and announced plans to beta test Blockchain-based smart contracts. The technology was also implemented by other major Indian banks including ICICI, Tech Mahindra, Yes Bank and Axis Bank.
In July, Ernst & Young (EY), one the Big Four, hosted Blockchain Hackathon at Bombay Stock Exchange (BSE) in Mumbai, India. The year was closed with the launch of the Blockchain Foundation of India, with major cryptocurrency players in India like Coinsecure, Unocoin, Bitxoxo joining hands with Industry leaders from PwC, Nokia, Microsoft, Yes Bank and Government of India.
Winners of 2017
The year 2017 saw mixed responses for Bitcoin and cryptocurrencies, with the government constantly relaying threatening messages. However, Bitcoin saw drastically increased trading volume in spite of the government’s efforts, and all Bitcoin exchanges saw considerable growth in their operations. Indian mainstream media also warmed up to Bitcoin this year, with many major publication houses running articles in favor of Bitcoin and cryptocurrencies. However, the biggest winner of the year was Bitcoin’s underlying Blockchain technology. Blockchain found many admirers across all sectors in the country, in government and in industry.
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