Sandeep Nailwal, CEO and co-founder of Polygon, believes there is a huge disruption in the Indian cryptocurrency market. In his opinion, this confusion has led thousands of developers, investors and entrepreneurs to leave the country where the regulatory framework is more friendly.

Uncertainty leads to cryptocurrency "brain drain"

It's safe to say that the digital asset landscape in India is controversial. On the one hand, the country is home to millions of cryptocurrency investors, some of whom have even switched their strategies from gold to bitcoin. On the other hand, the government and the country's financial regulators have been considering how to approach the industry for years, which has created uncertainty in the process.

At some point, authorities want to criminalize the use of bitcoin and other digital currencies. In November 2021, they reiterated those plans, proposing a ban on the industry similar to the one in China. Soon after, however, officials changed their stance, insisting that regulation was better than a full ban.

Whatever their final decision, Polygon co-founder Sandeep Nailwal believes this uncertainty has led many Indian developers, investors and entrepreneurs to leave their home country and settle in other countries with established rules.

The executive outlined his desire to live in India and continue developing his blockchain protocol. Nevertheless, the situation there is very unfavorable for such progress.

“Overall, the way regulatory uncertainty exists and how large Polygon is, it doesn’t make sense for us or any team to expose their protocols to local risk.”

Sandeep Nailwal, source: Entrepreneur

It is worth noting that the implementation of proper rules in space could turn India into a cryptocurrency powerhouse. This country has a population of 1.4 billion people, as many of them are young and quite tech savvy. Moreover, India has the second highest cryptocurrency adoption rate after Vietnam.

Central Bank of India supports CBDC

While the authorities have a rather negative view of bitcoin and cottage coins, the same is not true of central bank digital currencies.

The country with the second largest population intends to launch the electronic rupee last year. The Reserve Bank of India announced it will launch a pilot program to examine how financial products interact with the local currency system.

The country's finance minister, Nirmala Sitharaman, praised these efforts and predicted that the use of CBDCs would "significantly boost" the local economy.

Indian Prime Minister Narendra Modi is also enthusiastic about the idea. He believes that digital rupees will make online payments faster and more secure. In addition, they could revolutionize the fintech industry by creating new opportunities and strengthening the global economy.

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