As global interest in Bitcoin (BTC) surges among public companies, private funds, and nations looking to establish the cryptocurrency as a strategic reserve, India is reportedly contemplating a similar initiative.
This move follows the lead of the United States, which unveiled its intention to create its own crypto strategic reserve, igniting discussions among digital finance experts in India about the feasibility and implications of such a step.
BJP Leader Calls For Strategic Bitcoin Reserve
According to the South China Morning Post, a prominent voice in India’s ruling Bharatiya Janata Party (BJP), Pradeep Bhandari, has advocated for the establishment of a strategic Bitcoin reserve.
He argues that India has a “unique opportunity to lead” in the digital finance space, drawing comparisons to Bhutan, which has successfully implemented a Bitcoin reserve strategy using its hydropower resources for mining.
Bhandari believes that a “carefully measured approach” to Bitcoin could bolster India’s economic resilience and modernize its broader financial landscape.
The backdrop to this discussion includes the recent rise in Bitcoin’s value this week, which has climbed by 80% year-to-date (YTD), reaching a new all-time high of around $113,000.
This increase has been partially attributed to a favorable stance from President Donald Trump, who signed an executive order in March allowing the creation of a Strategic Bitcoin Reserve from seized digital tokens.
India’s Regulatory Challenges
Despite the growing interest in this initiative, India faces significant hurdles in establishing a Bitcoin reserve. Currently, the regulatory environment is uncertain, with cryptocurrencies being largely unregulated.
The Supreme Court had lifted a previous ban on cryptocurrencies imposed by the Reserve Bank of India (RBI), which had raised concerns about illegal transactions. Nonetheless, investors in India have been increasingly drawn to cryptocurrencies, even with the government’s tough stance and steep taxation on crypto profits.
Anndy Lian, a blockchain adviser based in Singapore, has noted that a Bitcoin reserve could offer India several strategic advantages, such as serving as a hedge against inflation due to Bitcoin’s limited supply and diversifying the foreign reserves portfolio.
However, Lian cautioned that the feasibility of such a reserve would depend heavily on regulatory clarity and infrastructure development. He emphasized the need for India to create a comprehensive legal framework for cryptocurrencies and to build public trust through education.
Raj Kapoor, chairman of the India Blockchain Alliance, echoed these sentiments, stressing that while the proposal for a Bitcoin reserve is promising, it cannot be implemented without addressing regulatory uncertainties.
Kapoor highlighted that Pakistan seems to be advancing ahead in this arena, partly due to apparent support from the US and China, putting pressure on India to act swiftly.
Benjamin Grolimund, UAE general manager at Flipster, added that while India’s established Unified Payment Interface provides a solid foundation for digital finance, integrating Bitcoin into national reserves will require robust custodial and auditing measures.
Featured image from DALL-E, chart from TradingView.com
