The launch of what calls itself India’s first cryptocurrency index is among a slew of recent startups in a sector that shows no sign of slowing down, despite regulatory uncertainty and calls by some for an outright ban on virtual currencies.

The Indian government has delayed acting on crypto regulation since 2019, when a bill first surfaced that sought to ban the use of digital assets. Since then, murmurs of a ban have haunted the crypto industry, but not enough to slow down its progress.  

Over the past two years, the number of crypto investors in India has more than doubled from 7 million in 2020 to 15 million in 2021. But it’s not just investors. Even crypto businesses in India seem to be unfazed by the lack of regulatory clarity as exchanges list more and more tokens, and crypto businesses launch new products. 

Although retail investors still remain susceptible to ban rumors, as was seen  with the panic sell-off when a crypto bill was listed on the parliamentary agenda for the winter session, crypto businesses are strongly convinced there will be no ban. 

India’s crypto bill has not been made public and the objective of the bill, as stated in the parliamentary agenda last year, was to “prohibit all private cryptocurrencies” with certain exemptions and to create a framework for a central bank digital currency (CBDC). The definition of private cryptocurrencies or the exemptions are not known. Therefore, insight into the government’s stance on cryptocurrency has been speculative. 

The only hints about the government’s pending decision comes from comments by finance minister Nirmala Sitharaman, who has assured the public multiple times the government will not shut out crypto. So crypto exchanges and businesses appear to be no longer burdened by fear of a ban. 

Just last year, two foreign exchanges, U.S.-based CrossTower and Singapore-based Coinstore set up operations in the second most populous country in the world. In an earlier interview, CrossTower CEO and co-founder Kapil Rathi told Forkast that he was 100% confident crypto will not be banned in India. 

Charles Tan, head of marketing at Coinstore, told Forkast: “In the worst-case scenario, if there is a complete ban on crypto in India, we will utilize the assets in India as our base to serve users across Southeast Asia. However, we are highly optimistic about India’s regulatory environment and hope to see clear regulatory guidelines to propel the crypto industry in India.”

Earlier this month, CryptoWire, a company started in December, launched what it calls India’s first crypto index. The index, called IC15, tracks the performance of the top 15 most traded liquid cryptocurrencies globally in terms of market capitalization, not including stablecoins. 

Within a few weeks, India INX, the international arm of BSE (formerly Bombay Stock Exchange) and Torus Kling Block Chain IFSC, jointly applied for regulatory approval for a Bitcoin and an Ethereum futures exchange traded fund (ETF). An ETF is a type of security that tracks an index, sector, commodity or other asset, but which can be traded on a stock exchange like any other crypto asset or stocks. 

While similar ETFs launched in the U.S. last year, including ProShares, they have not fared well. But this has not stopped Indian companies from trying to expand the reach of Indians into the crypto market by trying to launch ETFs. 

Anirudh Rastogi, founder and managing partner at Ikigai Law, who has been privy to closed-door discussions with government officials on crypto regulation, told Forkast that signals from the government have been “mostly positive” recently. However, the Reserve Bank of India — the country’s central bank — continues to lobby for a ban. 

Rastogi added that the industry is not unfazed by regulatory uncertainty, but is rather used to it. “Given the opportunity that exists now, the risk of adverse regulatory changes appears bearable” to businesses, Rastogi said. In other words, the rewards outweigh the risks of regulatory clampdown on the crypto market. 

But behind the scenes, companies have not completely thrown caution to the wind. Several products are restructured before launch or never see the light of day because of the looming uncertainty, said Rastogi, who also advises crypto companies. 

While even former finance secretary Subhash Garg, who authored the 2019 crypto bill, has switched positions to support regulation over a ban and called crypto-ban fears in the country an overreaction, until the new bill is made public, the fate of the Indian crypto industry remains uncertain.