In February, the number of transactions on India’s leading cryptocurrency exchanges reached its highest level in ten months as a result of the recent rise in the price of Bitcoin (BTC).
Citing data provided by Crypto Crebaco, a research firm, BusinessLine reported that India’s leading exchanges, CoinDCX, WazirX and BitBNS, recorded turnover of $2.6 million, $3.4 million and $7.8 million, respectively, last month.
The report notes that these figures did not reach the historic peak of 2021, but represent the highest monthly volumes since June 2023.
Increased demand for cryptocurrencies is due to increased trading volumes
Improved sentiment and international demand for cryptocurrencies were the main factors contributing to a surge in trading volumes on Indian exchanges. WazirX Vice President Rajagopal Menon said: “Improved sentiment and demand around the world contributed to the increase in trading volumes on our exchanges.”
“2024 will be the year of cryptocurrencies, although Indian exchanges may see a decline in volume due to the tax system.”
The increase in demand for the most popular cryptocurrency can be attributed to the new exchange traded funds(ETFs) that have rapidly spread Bitcoin.
This year, the value of the largest cryptocurrency, Bitcoin, has increased by more than fifty percent. Most of this growth has occurred in recent weeks as a result of the rise of exchange traded funds in the United States.
This upward trend is expected to continue as Bitcoin approaches its halving cycle in April 2024, which could further increase demand and boost prices.
The platforms have experienced a low level of transactions since the 2022-2023 bull market. As a result, the Indian government has imposed a 30 percent tax on cryptocurrency trading. Menon emphasized the beneficial impact of the market’s growth, saying: “Deposits have increased by 80 percent in the last three months compared to the previous three months.” At the same time, the number of transactions on the platform doubled.
Country continues plans to introduce CBDC
Last month, Shaktikanta Das, governor of the Reserve Bank of India (RBI), proposed implementing offline solutions to increase the use of the central bank’s digital rupee in remote regions.
During a review meeting of the Monetary Policy Committee on February 8, Governor Das said: “It is proposed to introduce offline functionality in CBDC-R to enable transactions in areas with poor or limited internet connectivity.”
Currently, the RBI’s digital rupee system allows person-to-person (P2P) and merchant-to-merchant (P2M) transactions through digital rupee wallets offered by pilot banks.
RBI is seeking to increase the usability and accessibility of the digital rupee by introducing offline functionality.
