Free Crypto Signals App –
https://play.google.com/store/apps/details?id=com.freecryptosignals.app
Visit – https://cryptobotauto.com
India could be a huge potential market for decentralized finance (DeFi)—unless the country’s government cracks down on crypto again.
In brief:
DeFi is poised to expand in India, tapping into the country’s underbanked and unbanked population.
Remittances are a big business in India, and DeFi is primed to disrupt this sector.
However, cryptocurrency’s legal status in India is on shaky ground, as the government reportedly mulls a ban on crypto.
India is poised to emerge as a leader for decentralized finance (DeFi) in Asia, experts say—but reports that the government could introduce a new ban on cryptocurrency threaten to stifle the industry in its crib.
DeFi provides financial services through a decentralized network that interacts with smart contracts and dApps, and is predominantly built on the Ethereum blockchain. Although it’s early days for DeFi in the world’s fifth-biggest economy, industry leaders in India believe that it’s vital to the country’s future prosperity.
SMEs are the heart of India, but they have the least access to capital,” Sahil Dewan, co-founder of Harmony Protocol, told Forkast.News.
As India’s economy reels under the impact of the coronavirus pandemic and subsequent lockdown, those in the industry say that DeFi may be more important than ever, with the clock ticking on businesses that are in dire need of credit or loans just to survive. A recent survey conducted by non-governmental trade organization Nasscom showed that 70% of Indian startups have less than three months of funds to keep going before they run out of money
How DeFi can boost remittances
Cross-border remittances are another area that DeFi companies are eyeing, in the form of Cross-Fi. Indian nationals working abroad face onerous fees from banks and money changers when they send money back home. “Some of these problems exist and they’re not solved by existing banking institutions and existing financial institutions,” Dewan said. According to the World Bank, the average transaction fee for cross border remittances is 7.45%, with traditional banks charging the highest rates. By removing intermediaries like traditional banks, DeFi may be able to help overseas Indian workers send money home more cheaply.
The United Nations has included remittance reform among its Sustainable Development Goals and wants to reduce remittance transaction costs to less than 3% by 2030. Dewan told Forkast.News that transaction settlements in Harmony’s public blockchain will be instant, and utility fees for transaction settlement will be negligible. Harmony’s cross-fi services could bring fees below 0.5%, according to Dewan—far below UN’s Sustainable Development Goal.
Although cryptocurrency can become a tool of transfer, Nuo Network’s Verma believes DeFi’s lack of liquidity and unsolved regulatory issues remain as obstacles standing in the way of mainstream adoption in India. “That is definitely going to remain a challenge in India because you will have to essentially use Coinbase and convert it over there, and then bring it back over here, and then there’s going to be a lot of investigations from the regulator,” Verma said.
The B2C (business to consumer) space in DeFi is already crowded,” Hemanth Kumar, CEO of Pontis, told Forkast.News. His Bengaluru startup aims to allow centralized exchanges to provide DeFi services directly to their customers by integrating DeFi protocols and bundling up application programming interfaces (API) and smart contracts. “That’s where we are trying to solve the challenge of how to bring DeFi goodness to the masses,” Kumar said.
DeFi is going to be a natural next step for the developers, for the community in India.”
Neeraj Khandelwal
To trade assets in India’s traditional markets, investors need to create a dematerialized account (demat). However, according to the Securities and Exchange Board of India (SEBI), only 40 million total demat account holders are registered in a population of almost 1.4 billion people. According to the 2017 Global Findex database, about 190 million people in India are still underbanked, and DeFi advocates say alternative financing services could fill this gap.
“When no other options increase in India, DeFi is going to be a natural next step for the developers, for the community in India,” CoinDCX co-founder Neeraj Khandelwal told Forkast.News.
India’s DeFi talent pool
DeFi can also benefit from doing business in India’s huge, hungry market as well as tapping into its world-class tech talent pool, industry advocates say. India’s IT-BPM (business process management) sector recorded $177 billion and 6.1% growth during the 2019 financial year. “A lot of development happened since the 2000s, [and a lot of] the software developments were actually done by Indians,” said Raghu Mohan, CEO of IBC Media, an innovation management firm headquartered in Sunnyvale, California.
A 2019 study conducted by Evans Data predicted that India would be home to the largest number of software developers in the world by 2024, overtaking the US. The world’s second most populous nation also boasts the world’s second-highest number of active Internet users, with over 500 million connected, according to the Internet and Mobile Association of India (IAMAI). India’s largest payments network, Unified Payments Interface (UPI), which provides transactions through mobile phones, is a domestic concept. India is also already the top remittance recipient in the world, receiving over $83 billion in 2019.
India’s government mulls reintroducing crypto ban
However, some in the government disagree that DeFi and crypto are the way forward for India. Last week, the Economic Times—citing an unnamed senior official—reported that the Indian government is now looking into ways to ban crypto outright.
freecryptobot 