Pros and Cons of a Strategic Bitcoin Reserve
Polygon COO Nailwal mentioned that US President Donald Trump has kickstarted a race to accumulate Bitcoin and different altcoins for long-term advantages to the US economic system. He mentioned that India, which is likely one of the fastest-growing economies on this planet, could remorse its conservative strategy on crypto if it fails to meet up with different massive economies in a well timed method.
“The world is long gone the times when Bitcoin was thought-about an experiment or just a haven for criminals. Some of the world’s largest asset managers, sovereign wealth funds, and nationwide governments have invested giant quantities of cash in BTC and the broader altcoin market, indicating the rising adoption of the asset class,” Nailwal advised Gadgets 360.
Abu Dhabi’s funding firm, Mubadala and Norway’s Norges Bank Investment Management (NBIM) are outstanding monetary corporations which have begun to take care of Bitcoin through investments in pro-crypto corporations like MicroStrategy, Tesla, and BlackRock’s Bitcoin ETFs. In India, Mumbai-based IT coaching agency Jetking has acquired Bitcoin tokens price Rs. 10 crore.
The January 2025 version of the World Bank’s Global Economic Prospects (GEP) report projected India’s economic system to develop at a gradual charge of 6.7 % in each FY26 and FY27, considerably outpacing world and regional friends. The IMF additionally estimates India’s development to stay sturdy at 6.5 % for 2025 and 2026. “India can critically think about making a crypto stockpile to diversify its reserves and elevate the mixing of blockchain with its financial ecosystem,” Nailwal mentioned.
However, the Polygon COO additionally cautioned that the authorities must strengthen tech infrastructure, cybersecurity, and introduce a regulatory framework for cryptocurrencies earlier than establishing a crypto reserve. Existing gaps in crypto consciousness, authorized provisions, and enforcement of legal punishments may pose dangers to India’s monetary stability if crypto is taken into account as a reserved asset.
Possible Avenues to Set Up Crypto Reserves
India can allocate one to 2 % of its international trade reserves to crypto belongings as a realistic start line, Avail Co-Founder Anurag Arjun advised Gadgets 360. Avail is a blockchain agency that helps the design of Web3 functions. Arjun additionally co-founded Polygon alongside Nailwal in 2017 however exited the agency in 2023.
“India must see the creation of a crypto reserve as extra than simply about leaping on a development. It’s extra about positioning India strategically in a quickly evolving world monetary panorama,” Arjun mentioned.
“An small allocation of India’s international trade reserves to crypto makes for a modest publicity that limits danger whereas enabling India to experiment strategically, mirroring establishments like BlackRock (managing $50 billion in Bitcoin ETFs) and firms like MicroStrategy, whose inventory surged 1,500 % after adopting Bitcoin as a treasury reserve. In the brief time period, such a transfer would place India as a forward-thinking economic system, attracting blockchain innovation and world capital,” he added.
Avail’s co-founder additionally highlighted that Bitcoin’s fastened provide of 21 million tokens provides safety towards inflationary pressures in conventional currencies, serving as a hedge towards financial instability in an more and more unsure world.
“With 17 % of the worldwide inhabitants and a tech-savvy workforce, India has the demographic and mental capital to guide fairly than comply with. Digital belongings provide a hedge towards greenback hegemony, a device for monetary inclusion, and a bridge to the digital economic system—vital for sustaining development in a digitising world. A late entry into the race would imply buying belongings at considerably increased costs, putting India at a strategic drawback,” he added.
India can be at liberty to keenly analyse US’ step of placing seized crypto funds into its crypto reserves. In February this yr, India’s Enforcement Directorate (ED) seized its largest crypto fund price Rs. 1,646 crore investigating a cash laundering case. Other related probes have additionally roped in hefty crypto funds which have been positioned below the custodies of Binance, ZepPay, WazirX, and CoinDCX.
Financial Analyst Suggests Caution
Nimen Shah, a senior chartered accountant and worldwide tax advisor from Mumbai, mentioned India’s monetary place is on stable floor, which eliminates any urgency for it to enterprise into creating crypto reserves.
“Cryptocurrencies are risky and nonetheless largely unregulated. They allow non-public monetary transactions with out the involvement of any central financial institution or dealer, making them inclined to misuse by criminals. Because crypto lets people course of monetary transactions with out an middleman, it threatens the autonomy and management of central banks on a world stage,” Shah advised Gadgets 360.
Over the previous few years, the Reserve Bank of India (RBI) lifted its ban on crypto, whereas the federal government launched a 30 % tax on cryptocurrency incomes, which has been criticised by many crypto traders.
In 2024, former RBI governor Shaktikanta Das known as crypto dangerous and extremely speculative, addressing the World Economic Forum (WEF) in Davos. Finance Minister Nirmala Sitharaman additionally acknowledged final yr that crypto can’t be seen as a legit foreign money in India.
“India needn’t rush right into a making a crypto reserve. Given the apprehensions of the RBI and different stakeholders, it will be a really lengthy leap to go from zero rules to crypto reserves,” Shah mentioned, whereas dismissing the thought of crypto turning into a substitute for the US greenback for India.
He mentioned that crypto actions are extra intensive within the US than in India. “Crypto shouldn’t be large enough both as an business or as a suitable sufficient asset class to affect our financial coverage or our monetary system. We are a good distance away from there,” Shah added.
As of Tuesday, the valuation of the crypto sector stood at $2.7 trillion (roughly Rs. 2,31,56.903 crore) with over 13 million tokens in circulation. Bitcoin, the costliest crypto token, is presently buying and selling at $85,600 (roughly Rs. 73.4 lakh).
