India occupies dropped from its second position regarding cryptocurrency adoption due to a stricter regulatory and financial landscape. According to a survey, over half of the Indian crypto investors consulted would continue reinvesting in cryptocurrencies.
In another turbulent week for depreciating fiat currencies, the Indian rupee (INR) reached a new all-time low.
The Indian rupee opened at INR 81.08 against the USD dollar before dropping to INR 81.23. Therefore, the Reserve Bank of India (RBI) had to sell US dollar reserves to stabilize its volatile (fiat) currency.
The Drop of the Euro and the Yen Precedes the Rupee
According to Reuters, the aggressive intervention at INR 81.20 by the central bank of India may offer temporary hope. An almost reassuring trader at a private bank said this might put a floor on the rupee for now.
The weakness of the Indian rupee and other fiat currencies received exposure worldwide. For example, the euro (EUR) reached a 20-year low, with EUR 1 equivalent to 98 US cents.
The Bank of Japan (BoJ) would protect the weakening yen (JYN) by intervening in the foreign exchange (FX) market. Meanwhile, fiat currencies tumble and fall amid soaring inflation, the Russia-Ukraine, and the shortage of goods.
The Indian Tax Laws Might Boost the Adoption of Crypto Assets
The Indian population has been among the most passionate crypto asset adopters worldwide. According to Chainalysis, India occupies 4th place regarding adoption, a drop by two positions since 2021, when it was second.
That drop in ranking is due in part to a much stricter regulatory and financial landscape. Five months ago, the Indian government implemented a 30% tax on crypto earnings, adding a 1% duty on transactions.
Sushil Kumar Modi, a member of the Indian ruling party, said this tax is not high enough. He stated that the government wanted to raise it directly to 50% and apply an 18% goods and services tax (GST). According to Modi, they aim to make life difficult for all crypto investors in the territory.
The management of the economy by the Indian government might be achieving that goal for all citizens, although they do not invest in crypto. Regardless of how disgusting they want to make cryptocurrencies, their mismanagement of the rupee makes the former more attractive.
Indian Investors Plan to Reinvest their Earnings in Cryptocurrencies
A survey conducted by KuCoin supports that view, as more than half of the Indian crypto investors consulted would reinvest in cryptocurrencies within six months.
The relevance of cryptocurrencies in the economy is growing, which many people worldwide know well. For example, the rupee has depreciated due to government mismanagement, which has led Indians to turn to cryptocurrencies.
Meanwhile, Bitcoin is trading at around USD 18,994 and has accumulated a 0.2% loss over the last 24 hours. While its daily trading volume is above USD 34.35 billion, its market capitalization is about USD 363.92 billion, according to CoinGecko.
By Alexander Salazar
