Does The Crypto Need Sitharaman Relief Packages To Combat Corona, or Is It A Force Unto Itself?

Tarulika  |  Mar 28, 2020

"Ache Dinn" are still maintaining social distancing with the crypto sector in India. Amid the outbreak of COVID-19 across the world, on March 4, 2020, the Supreme Court of India declared that the "blanket ban" announced by the Reserve Bank of India (in 2018) is unconstitutional . The crypto enthusiasts thought that the "crypto would not be quarantined anymore", and they could start trading in Indian crypto markets. But few of them believed that Corona might not allow them to buy even on stock markets, forget about investment in crypto space. Coronavirus hit the globe so badly that government of India announced complete lockdown fr 21 days. Relief packages were also announced by the Finannce Ministry and Reserve of India. Many of the crypto enthusiasts are assuming that relief packages to combat Corona might virtually affect the Indian crypto markets too.

Crypto Movement In India


Crypto markets in India were moving favourably after the court lifted the blanket ban (effect of corona was not serius till then!) . Cryptocurrency exchange Binance had already announced plans to infuse $50 million into Indian crypto markets via "Blockchain For India" Fund which was co-launched by WazirX (an Indian cryptocurrency exchange).CoinDCX, Indian crypto exchange also announced to allocate $1.3 million in the "TryCrypto", the project which aims to educate around 50 million people across the country.

Bitcoin prices started to surge, and the weekly volume of trading on top exchanges in India almost doubled. But, the crypto movement was soon halted when the novel coronavirus increased the toll of deaths, and the global economic slowdown started. On March 11, 2020, COVID-19 was declared a pandemic by the World Health Organisation and suggested the governments of every country of the world to take serious steps to combat Corona.

Would Lockdown Kill Corona?


The hustle-bustle of Indian streets, noises from construction sites, and honking vehicles are quiet since the Prime Minister of India has announced the complete lockdown since last week. To safeguard the people of the country and decrease the number of corona infected cases or instead stop the spread of the virus; unprecedented lockdown of 21 days has been announced, covering every corner of the country.

The lockdown was announced to "break the chain". It has been recommended by the doctors and researchers from every medical institution to maintain the distance to decrease the spread of virus. After the grand success of Janta Curfew of March 21, the government of India asked the factories to shut down, construction activities to stop, prohibited mass gathering thereby practicing the social distancing and confining people at home. This move instantly impacted the stock markets of India (Sensex and Nifty), economy of the country and most importantly affected the incomes of daily wage earners.

Relief Packages To Combat Corona Announced By Indian Government


After two days of announcing the lockdown, Finance Minister of India, Nirmala Sitharaman announces the relief package of Rs. 1.7 lakh signifying the responsibilities of government to protect the marginalised section from the corona pandemic and nationwide lockdown. She also hinted to announce few more relief packages to combat Corona for micro, small and middle enterprises in the coming days.

Can the crypto sector of India also expect the headline "FM announces relief packages for crypto markets?" Maybe no.! Large corporations or people having enough to spend for the coming months may not expect any big announcement from government. Many of us consider that Indian crypto markets still do not have enough trading volume or won't affect a large chunk of people. But after the landmark decision of Supreme Court, the inflow of significant funds, resuming of various crypto exchanges and a massive infusion of investments lighten up the crypto space of India.

Can Crypto Force Unto Itself In India?


Amid the chaos and warnings, the lockdown can be considered in a way the best time for crypto enthusiasts to think and plan about the strategies to evolve the Indian Crypto markets. It can be stated that crypto space in India does not need any relief packages to combat Corona as it has the potential to rise on its own in a country like India due to following reasons:

  • Largest remittance markets with a total amount of more than $70 billion, which is suffering from the high conversion fees. Bitcoin or Crypto being borderless can be used as an alternative amid and after crisis ,which may reduce the transaction fees along with speeding up the transfer.
  • A major population of the country is unbanked even after the success of Jan Dhan Yojna. This is due to a lack of substantial documentation needed to open a bank account. Crypto coins can facilitate unbanked population to transact without any central authority after the lockdown.
  • In the present situation, being the contactless currency, bitcoin has the massive potential to boom the market during the lockdown or quarantine days. 
  • High demographic dividend which is presently trying to counter the effects of the falling economy by doing work from home, are also deploying the methods to invest their savings in the alternate currency. According to the reports of Economic times, in recent years almost 400,000 of youngsters have invested in Bitcoins.
  • Reduction of rate of corporate tax, introduction of tax holidays for startups, efficient online system and the famous Goods and Services Tax, can attract the major crypto exchanges to set up their business in India in near future. Undoubtedly, the mentioned facilities will also lure the startups associated with cryptocurrency products and services. Thus, the crypto space might be Corona infected but has the potential to rise in Indian Markets after the lockdown.
  • Banglore, Noida, Hyderabad, Gurugram etc. are the hub of multinational companies in India. MNCs are continuously engaged in evolving their payment methods and accelerating digital revolution. For instance, Dell recently included digital assets as one of their modes of payments. This move of Dell may inspire the other MNCs to add digital coins as one of their methods of transaction.
  • Thus, the lockdown may prove as an opportunity for crypto enthusiasts and crypto traders to think wisely and stratergise to invest in crypto markets during the chaotic situation.

    Go, Corona Go!!


    This hard stop in the economy is not only faced by India but by the whole world.The financial along with medical emergency (huge demand for masks and sanitizers) might cause the situation of recession in the country. But the potential benefits of crypto markets could counter the ill effects of the economy. The crypto markets have the primary advantage of decentralisation (not backed by any central authority). Bitcoin can act as the saviour as it might save the country from increased price inflation, loss from stock markets shut down and forceful pumping of liquidity by the central authorities of the country. Thus, cryptocuureency must be added as the part of economy management in the present situation.

    As the threat of COVID-19 has been engulfing the world, the approach of the Indian government and the announced relief packages to combat Corona can safeguard the lives and income of the people of the country. Though it has stolen the thunder associated with "Bitcoin halving", but "Ghar rahega India, Tbhi to Rahega India" will soon flip the situation. The bizarre search for "Bitcoin coronavirus" has presently replaced "Bitcoin halving" but crypto markets will soon be seen as the solution to the medical emergency.

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