Indian Women and Finances: A Tough Road to Crypto Investment in 2023

Indian Women and Finances
Indian Women and Finances

Indian women and finances play the game of hide and seek. Be it the top positions in the corporate structure, financial planning, investment through alternatives like the stock market, or cryptocurrencies, Indian women often take a back seat.

Let’s check if we can decode the correlation between Indian women’s financial freedom prospects, their recent rising crypto market participation, and role of the Indian government’s stance on cryptocurrencies.

Indian Women and Finances: A Glaze at Statistics

Deloitte Global’s 2022 report states that only 17.1% of women occupy a seat on the board in India, an increase of 9.4% in the last 8 years. The number remains marginally low than the global average of 19.7%. The skewed ratio is transposed on their investment patterns too.

The ratio of Indian women investors in the stock markets remains only 24% of their total population. It’s important to mention that this data represents the number of Demat accounts opened by female investors and not their activity. Most of these accounts are dummy accounts, opened in their name to manage family income. I can vouch for the above data. I have opened an account in my mother’s name, merely for physical share dematerialization. I have no intention of operating them after they serve their purpose. 

Moreover, only 7% of Indian women are confident enough to make their financial decisions themselves, reveals Women & Money Power 2022 survey conducted by LXME. On the bright side, 20% of women actively invest in cryptocurrencies despite ill-formulated regulations in India out of 115 million crypto investors all over the country. I say the bright side because the rise of Indian women in the crypto market is nearly 1400% between January 2021 to January 2022, comparable to Indian men. 

The phenomenal rise in women’s participation may be partly due to the lifting of the cryptocurrency payment ban by the Hon’ble Supreme Court of India on 4th March 2020. However, the constantly changing stance of the Government of India on cryptocurrency, massive tax obligations of 30%, and hype around the crypto terminologies are the major deterrents to inhibited investment.

All You Need to Start Your Crypto Journey

Cryptocurrency, Indian Women and Finances
Cryptocurrency, Indian Women and Finances

If you have been planning to start investing (or even trading) in the cryptocurrency market, here’s all the crypto terminology you need to know. 

Digital Currency

It refers to an electronic form of currency exchanged over a centralized or decentralized network. There are three kinds of Digital currencies: stablecoins, cryptocurrency, and central bank digital currency (CBDC).

Cryptocurrency is a virtual currency developed using secured cryptography or blockchain technology. Blockchain is a peer-to-peer network and is not controlled by any government or organization. The transaction data in a blockchain is stored in encrypted layers and is available to all the participants. This makes data counterfeiting nearly impossible. 

A stablecoin is a Digi currency whose value is attached to another asset class/ fiat currency like US Dollar. They act as volatility controllers during turbulent markets. CBDC is a type of cryptocurrency that is under the direct control of a central bank. The first digital currency that came into existence is Bitcoin (BTC).

Centralized vs Decentralized Exchanges

Centralized exchanges (CEX) are the platforms where brokers allow buying and selling in lieu of their commission. They have a central authority to keep things in check. They are also in control of your digital assets. Examples of CEX include Binance, Coinbase, etc. 

Decentralized exchanges (DEX) on the other hand, are a peer-to-peer marketplace where the user holds his own assets. DEX provides a way for its users to earn fees by providing liquidity to the system. Examples of DEX are UniSwap, Kyber, etc.

Cryptocurrency Wallets

If you are trading in the crypto markets via DEX, you will need a cryptocurrency wallet. A wallet stores a private key that is unique to the user and serves as the secured lock to his cryptocurrency holdings. You can read a detailed account of cryptocurrency wallets here!

A legal tender is any object as recognized by law that can fulfill a debt or financial obligation. For example, You can use INR 50 to buy chocolate in India but no amount of BTC will work legally. 

Cryptocurrency Exchanges

Cryptocurrencies can be purchased or sold through crypto exchanges. They are the trading platform that allows you to buy cryptocurrency from fiat currencies like Indian Rupee, U.S. Dollar, etc. for small fees. According to Forbes, the top 10 crypto exchanges in India as on December 2022 based on their performance, features, charges, customer support, and user interface are:

  • CoinDCX
  • CoinSwitch Kuber
  • WazirX
  • UnoCoin
  • Bitbns
  • Zebpay
  • BuyUCoin
  • NAGAX
  • Giottus

The list is in no way exhaustive and other options are available too. For instance, I prefer Binance, the world’s largest cryptocurrency exchange for its low trading fees and high liquidity. 

Timing the Market: Risks and Rewards

As with stock markets, you need to keep in mind the plausible profit and loss an crypto investment can offer. Most people buy cryptocurrencies at their peak and suffer major losses when market turns. Alternatively, they wait for too long to sell a loss-making asset. 

Although it is nearly impossible to time the market, it is always advisable to buy after due research. Often, temporary market dips provide excellent buying opportunities. Needless to say, you need to be mindful of the micro- and macro-economic factors and global geopolitical events while investing. 

If you are worried about protecting your money during the recent crypto crash, you should know that there are proven strategies to save yourself from making losses. Timely exits based either on profit percentage or market scenarios like all-time high valuations always stand out.

Is the Indian Regulatory Framework Responsible for Lack of Enthusiasm in Crypto?

The world learned about Bitcoin as an electronic cash system in 2008 through a paper publication. But it was only 2 years later that it was used in place of money to buy a tangible material, two pizzas. The rest was history. For almost a decade, the crypto exchange happened without any national regulations. El Salvador was the first country to recognize Bitcoin as a legal obligation in 2021. 

In Indian perspective, crypto regulations have been a ball in the hands of the Reserve Bank of India (RBI) and other government bodies, and the Indian judiciary. In the year 2013, RBI issued the first warning circular against the security concerns associated with intangible currencies. However, trading in cryptocurrency continued in India and the RBI was forced to declare that cryptocurrencies aren’t legal tender in 2017 questioning their reliability and the future in Indian financial sectors.

Soon after, a ban on virtual currencies was imposed in India. In April 2018, the RBI restricted national banks, nonbanking financial services (NBFCs), and other payment gateways from recognizing crypto payments. The step resulted in a massive trading volume loss to Indian crypto exchanges.

The Winds of Change

In November 2018, WazirX founder, Nischal Shetty, took on himself to bring the winds of cryptocurrency change in India. He worked on the #IndiaWantsCrypto movement and received support from people from all walks of life. 

The first victory for Indian cryptocurrency enthusiasts came in March 2020 with the Supreme court lifting RBI’s crypto banking ban. In November 2021, Parliamentary Finance Standing Committee and the Blockchain and Crypto Assets Council (BACC) accepted that cryptocurrencies shouldn’t be banned. As a follow-up, the GoI announced a 30% tax on virtual digital asset transactions thus bringing crypto to the tax regime of the country in the Union Budget 2022. 

On 1 December 2022, the Indian digital rupee, the e-rupee, was launched as a legal tender. Four eligible Indian banks, State Bank of India, ICICI Bank, IDFC First Bank, and Yes Bank are facilitating e-rupee transactions amongst a closed user group on a pilot basis in New Delhi, Mumbai, Bhubaneswar, and Bengaluru. It is merely the nascent stage of virtual currency acceptance in India. The RBI plans to expand the pilot project Pan India in a phase-wise manner. Considering the Indian government’s cautious treading into the era of cryptocurrency, the future looks promising.

To this date, only two nations, El Salvador and the Central African Republic, have adopted a legal framework for cryptocurrency trading. However, many more are working on their regulatory frameworks to facilitate inclusion. How can cryptocurrency not be legalized when it crossed $3 trillion worth at its peak? It seems like only a matter of time and tide.

Are you going to be a part of the next crypto boom?

Also read 5 Best Investments To Get Higher Returns On Savings .

Disclaimer: The content in this blog is based on the author’s experience and in no way can be construed as financial advice. Reader’s discretion and professional advisory are recommended.

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