[Year in Review 2021] Here are the top 5 milestones in blockchain and crypto in India

Cryptocurrency, NFTs, blockchain, and other related buzzwords captured the attention of India in 2021.

Over the last year, crypto has grown in popularity in the country, and led to two Indian crypto exchanges turning into unicorns. It has also attracted big-ticket investments from global VCs, and pushed local authorities to figure out a way to regulate them.

While Indian innovators have been building blockchain-based Web 3.0 solutions for the world, the mainstreaming of crypto led to several milestones this year.

Here are five of the key milestones India witnessed in the blockchain and crypto space in 2021:

India ranks 2nd in global crypto adoption in 2021

In August 2021, a report by blockchain data platform Chainalysis ranked India second in terms of global crypto adoption in 2021, amidst global crypto adoption rising over 880 percent in the last year.

In the report titled 'The 2021 Global Crypto Adoption Index', Chainalysis ranked India just behind Vietnam, which took first place out of 154 countries surveyed.

"The index ranks the top 20 countries and provides an objective measure of which countries have adopted cryptocurrency to the greatest extent after a year of exponential growth for cryptocurrency markets and increased attention for the industry," Chainalysis said in the report.

India gets its first crypto unicorn: CoinDCX

Indian crypto exchange CoinDCX became the nation’s first crypto firm to turn unicorn when it closed a $90 million Series C funding round, led by Facebook Co-founder Eduardo Saverin’s B Capital Group, in August 2021.

The Series C funding round raised CoinDCX’s valuation to $1.1 billion.

The round also saw participation from existing investors such as Coinbase Ventures, Polychain Capital, Block.one, Jump Capital, among others, alongside other veteran investors.

At the time, CoinDCX said the newly injected funds will be used predominantly to further the crypto startup's ambition of ensuring that "crypto awareness is spread to the length and breadth of India".

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Large institutional investors enter Indian crypto market

Following the entry of B Capital Group and Coinbase Ventures in India with the CoinDCX round, India saw its second crypto unicorn emerge along with the entry of more global VCs.

In October 2021, CoinSwitch Kuber announced its $260 million Series C round of funding from Andreessen Horowitz (a16z), Coinbase Ventures, and existing investors Paradigm, Ribbit Capital, Sequoia Capital India, and Tiger Global.

With a valuation of $1.9 billion, CoinSwitch Kuber’s total funding reached $300 million, and marked the entry of a16z - a global, leading venture capital firm with a $2.2 billion crypto fund - into India.

Indian government launches national strategy on blockchain

In December 2021, the electronics and IT ministry released a national strategy on blockchain for adopting the technology in government systems, especially for e-governance services.

The ministry has adopted a multi-institutional approach for the national blockchain framework, which includes C-DAC for research and development of the framework, NIC and NICSI for hosting the national-level blockchain infrastructure, and offering blockchain as a service.

"The national strategy to evolve a trusted digital platform for providing e-governance services using blockchain lays out overall vision and the development and implementation strategies for a national blockchain platform covering the technology stack, legal and regulatory framework, standards development, collaboration, human resource development, and potential use cases," the strategy document said.

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Indian government plans bill to regulate crypto

Through the second half of 2021, reports indicated the Indian government was looking to introduce a framework to define and regulate cryptocurrencies in India. 

Contrasting reports of outright bans and the possibility of regulating crypto as an asset class led to confusion in the markets as several tokens recorded steep declines in prices in November 2021.

Initially, the government announced it would introduce the bill in the winter session of Parliament, with the purpose to create a facilitative framework for issuing a Central Bank Digital Currency as well as prohibit crypto in India.

Later, it was reported the CBDC initiative was separated from the crypto bill, which would seek to regulate crypto as an asset class, instead of an outright ban.