How Bitcoin adoption will help India achieve its $5 trillion economy?

In 2019, India's Prime Minister, Narendra Modi, envisioned India becoming a $5 trillion economy by 2024-25. If India meets that goal, it will become the world's third-largest economy. Given India's current economic performance, achieving that dream with a 1.3 billion population appears extremely difficult. In fact, cryptocurrency adoption could be the key to India's economic future.

The evolution of Bitcoin, Ethereum, and other cryptocurrencies has been compared to the internet in the 1990s. Ethereum is the second unique cryptocurrency that gave birth to an entire industry known as 'decentralised finance' (DeFi). People are interested in crypto news and keep an eye on the changing Bitcoin price, Ethereum price, and the values of other cryptocurrencies. But have you ever considered that these digital currencies could help India become the world's third-largest economy?

Let us see how it can assist India in reaching a $5 trillion economy by 2025.

What is India's current standing?

India is one of the most notable emerging economies, having introduced the digital currency bill this year. It is currently ranked seventh in the world, with a nominal GDP of $2.72 trillion, and is expected to overtake the United Kingdom in the coming years.

When India adopted economic liberalisation in 1991, it aided the country's economic growth at the time. This economic reform assisted India in attaining the status of a developing country, but it later failed to implement similar reforms. Otherwise, it would have advanced to become a fully developed country by now.

If India wants to have a $5 trillion economy by 2025, its annual growth rate should be at least 10.8 percent. India's GDP growth rate dropped dramatically from 8% last year to 5% in the second quarter of 2019. Manufacturing growth in India has slowed sharply as a result of lower sales growth, causing factories to close.

Another factor slowing India's economic growth is the country's rising unemployment rate. India's unemployment rate was 8.5 percent in October 2019, the highest in three years. Over $3.2 billion has been withdrawn from the Indian capital markets by foreign portfolio investors who were net sellers of Indian stocks.

Following all of these disappointing results, India has implemented a slew of economic stimulus measures. Because the Covid-19 pandemic has harmed not only India's economy but also the economies of all emerging countries, it will take some time for India to achieve its desired vision.

However, it has another big chance to live up to this potential right now if it adopts another radical monetary innovation, 'Bitcoin.' The Supreme Court's historic verdict and Covid-19, both of which occurred in March 2020, boosted crypto adoption in India.

Many institutional investors, including hedge funds in the United States and other behemoths like PayPal and Square, are entering the crypto space globally. All of this promotes the use of Bitcoin.

How can cryptocurrency aid India's goal of reaching a $5 trillion economy?

What the Indian government needs to do is legalise direct investment in cryptocurrency assets through banking channels. The adoption of cryptocurrency will create new businesses, entrepreneurs, startups, products and services, and innovations, or it will create an entirely new market. As with the internet, smartphones, and other new technologies such as AI, blockchain technology is gaining traction in countries such as Singapore, Germany, and Switzerland. The government of India, like other countries, should allow cryptocurrency to flourish in the country in a regulated manner.

If the Indian government allows its citizens to invest in cryptocurrency through regulated channels, the 1.3 billion-person population's purchasing power will rise. India's current per capita income is just over $2,000, which is significantly lower than that of other developed countries. Furthermore, the doors to the world's best-performing markets are closed to average retail investors, leaving them with few options in India's equities and commodities markets.

The development of blockchain technology will result in the formation of numerous businesses. When the Indian government begins to regulate Bitcoin and other crypto assets, there will be significant innovation, leading to the creation of a plethora of crypto-related jobs in technological engineering, marketing, and other fields.

In the aftermath of Covid-19's devastation, blockchain has created job opportunities in India and around the world. Currently, over 300 startups have created tens of thousands of job opportunities as well as millions of dollars in revenue and taxes. Why should Indian blockchain companies be left behind in terms of job creation? - The business is booming. BuyUcoin, one of India's largest digital currency exchanges, which will have grown more than 15 times by 2021.

Conclusion

Without a doubt, cryptocurrency adoption will assist India in reaching its $5 trillion economic goal, if not exceeding it. It would not be incorrect to say that it can assist India in becoming the economic powerhouse that it has the potential to be. The Indian government, however, added a twist by announcing a 30% tax on earnings from cryptocurrencies and other virtual digital assets. Let's take a look at how the crypto tax might affect Indians.