Web3 Industry Touts Benefits of Cryptocurrencies, Blockchain Technology on National Fintech Day

Executives from the Web3 sector claim that cryptocurrencies will have an impact on upcoming improvements to the fintech space in India.

Written by Radhika Parashar, Edited by David Delima | Updated: 20 August 2024 18:30 IST

Web3 Industry Touts Benefits of Cryptocurrencies, Blockchain Technology on National Fintech Day

Photo Credit: Unsplash/ Clint Adair

The RBI is exploring blockchain integration with financial system via CBDCs

Highlights

India’s Web3 developer pool has risen significantly in recent years
India’s fintech industry is estimated to reach $1.5 trillion by 2025
Crypto can make the fintech industry more inclusive, experts have said

In India, the fintech industry reached an important milestone with the launch of UPI payments in April 2016. By 2027, UPI transactions are expected to cross the 100-crore mark, as per a report by PwC India. August 20 is observed as National Fintech Day to celebrate the annual growth of the collaboration between the sectors of finance and technology. Marking this year's National Fintech Day, Web3 sector executives have claimed that cryptocurrencies and blockchain technology will have an impact on upcoming improvements to the fintech space in India.

In conversation with Gadgets360, Rohan Kulshreshtha said Web3 elements like cryptocurrencies and fractional NFTs enable inclusion of smaller players into the national and national investment ecosystem. “People can invest as little as INR 50, not a lot of other investment tools in the market offer this. In addition, age isn't a criteria like with banking and the rest of them, under 18-year-olds globally can have multiple wallets before they have their own bank account,” said the chief marketing officer of Contrade.ai. It's worth noting that existing fintech apps like Deciml and Jar allow users to invest with even smaller amounts, starting at Rs. 10.

In October 2022, 43 percent of Gen Z and 47 percent of millennials in the US stated in response to a survey that they are already investing in cryptocurrencies outside of their 401(k) retirement plans. The finding was published in a survey conducted by US asset manager Charles Schwab, that also highlighted that people in the US are already looking into making digital assets a part of their conventional pension plans supported by licenced employers.

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Web3 sector executives are also touting the role that blockchain technology is playing in the fintech sector. Some have pointed to the RBI's initiative to launch a blockchain-based digital rupee for internal use in India, as well as for cross-border settlements.

Transaction logs recorded on blockchain networks are permanent and unchangeable. This brings more transparency to financial logs. In addition, blockchain stores data related to financial transactions as small packets of information distributed throughout the information as opposed to traditional servers where details are concentrated at one point of source. This makes blockchain more secure to hold financial details securely, while protecting information from being hacked.

“The adoption of blockchain in the current fintech industry will make data immutable, increasing transaction efficiency, and enhancing security. Blockchain will soon become a catalyst to boost consumer trust, prompting governments to issue clear guidelines to accommodate mass adoption.”

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Invest India (or the National Investment Promotion and Facilitation Agency of India) estimates that the market capitalisation of India's fintech industry stood at $584 billion (roughly Rs. 4,893 crore) in 2022 and is predicted to reach $1.5 trillion (roughly Rs. 1,25,67,817 crore) by 2025.

In April, a report by Hashed Emergent revealed that India's Web3 developers pool rose significantly to 12 percent this year from 3 percent in 2018. The report also claimed that projects around Web3-compatible finance, entertainment, and infrastructure services are garnering the attention of venture capitalists towards India.

“The country's fintech adoption rate is 87 percent, significantly higher than the global average of 67 percent,” Rahul Pagidipati, CEO, ZebPay told Gadgets360. “The persistent innovation of the sector is creating an inclusive ecosystem and democratising access to banking and financial services,” said Asva Capital Associate Onkar Thakur.

Web3 executives have also reiterated their request to the Indian authorities to support the exploration of technologies like blockchain and crypto as part of the existing financial systems.

“Despite setting special economic zones like Gift city, the Indian government needs to setup single window clearance via a paperless process. This will help in faster incorporation of companies and welcome more global brands. Regulatory sandbox for use of blockchain in fintech and acceleration programs are still missing pieces. Matching grants and special funding via government agencies can help,” said BlockOn Ventures Founder and CEO Jagdish Pandya.

On a global level, banking giants including Goldman Sachs, Mastercard, HSBC, and Visa are also actively dabbling in initiatives and services related to crypto and blockchain technology.

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Further reading: Cryptocurrency, Fintech, National Fintech Industry, Blockchain, CBDC

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More