Financial ecosystems worldwide have been in a state of crisis since the Coronavirus outbreak. When this was happening, the Indian financial space was rocked by the news of the bankruptcy of Yes Bank and the subsequent takeover of State Bank of India [SBI].
Some people now believe that Indian crypto proponents can use the Yes Bank disaster as an example of how fiat structures can fail. They can also argue that such a high debt rate would never have been accumulated in a cryptocurrency-based environment.
In the past couple of months, India has seen a large chunk of its population shift to digital platforms. The younger population uses applications such as GPay that rely on the UPI system. At the same time, a lot of people have lost confidence in the banking system due to fumbles like the Yes Bank scenario.
Just recently, Yes Bank broke down after owing billions of dollars to debtors. The bank has told its depositors after the last count that it will return approximately $20 billion in cash. Amid all this, the Indian government will suggest a move to blockchain technology to better protect the finances of citizens.
The Supreme Court of India recently struck down a ban against cryptocurrencies, much to the surprise of crypto proponents. Right after that decision, the Reserve Bank of India argued that digital assets should remain banned because of its role in funding online terrorism. What they do not realize is the sheer opportunity that lies ahead of them with blockchain technology.
Once Yes Bank sees all its bank holders leave, other banks would require an increase in liquidity to handle the increase in customers. This liquidity factor would serve an important role in a banking system catering to the younger generation. Some supporters of the digital asset industry stated that the RBI could play an active role in regulating crypto transactions.
India could take inspiration from China to establish its digital currency. The Xi Jinping led country plans to launch a CBDC in the coming months, much to the anticipation of other nations as well. China was also in the limelight when the government filed multiple patents related to blockchain technology.
The good news was that some organizations in India had already begun supporting blockchain projects. A couple of weeks ago, Tech Mahindra was involved in the release of a blockchain venture in the state of Telangana. The state officials revealed that they planned to convert the area into the Blockchain capital of India.
The Bank for International Settlements [BIS] has identified multiple locations across the globe for a possible crypto setup. If India plays its cards right, it might well be able to join that club. At the time of writing, the BIS had surveyed cryptocurrency projects in over seventeen countries. The rapid development in the cryptocurrency industry has to be something India needs to be a part of. Else, companies like Facebook would run away with the baton to the finish line.