Millennials are betting huge on cryptocurrency, Govt should know this

by Sep 13, 2020Uncategorized

India has high economic ambitions. This ambition can turn into reality, only when there is substantial amount of investment in domestic economy. Which is not happening at the pace it should. May be people neither have money nor the knowledge to invest. But, Is it actually true? Then why are Indian millennials investing in risky cryptocurrencies, where are they getting money? Or is it the fault of investment apparatus in India for not doing enough for the new generation?

Government should know why millennials are investing in cryptocurrency. The following could be the possible reasons:

  1. The cult and fear:
    1. Millennials do not want to lose the cryptocurrency bandwagon.
    2. They do not want to be in a position in the future, when their peers are millionaires and they have already missed the bus.
  2. Convenience:
    1. It is easier to invest in cryptocurrency without any cumbersome process.
    2. Transferring cryptocurrency is simpler and cost effective.
  3. The crusading factor:
    1. The concept of democratic way of valuing a currency brings in transparency.
    2. The monopoly of central banks and governments as the sole currency generator and manipulator does not justify the value of currency.
    3. The idea of making the world less complex where there is no currency conversion, no transfer fee and no banking fee.
  4. The hope:
    1. Cryptocurrency can be the mainstream currency.
    2. Governments will align with the new economic order.
  5. Lack of opportunity:
    1. Lack of investment opportunity in early stage companies, which has huge growth potentials. There could be many lucrative IPOs but marketeers have failed to engage with Millennials.
    2. Its not easy to invest in startups in India, as equity crowdfunding is not real.

What can SEBI/Government do?

  1. Ask CDSL and NSDL to open Demat accounts with online Aadhar authentication.
  2. SEBI should go paperless, process-less and online-only, for opening new stock exchanges, equity crowdfunding portals and stockbroker accounts.
  3. Allow stockbrokers and equity crowdfunding portals to onboard new investors through Aadhar authentication and online payments(without manually registering the source bank account).
  4. Crowdfunding portals should have the freedom to operate and list companies at their own discretion.

It’s high time for government to take some proactive measures to bring back its millennial investors and avoid any churn of existing investors from the capital market to cryptocurrency.