MUMBAI — India, the world’s second-most populous country, is increasingly embracing cryptocurrencies amid domestic economic issues and the nationwide coronavirus-related lockdown. 

It started on March 4 when the country's highest court quashed a Reserve Bank of India (RBI) order dated April 6, 2018, which prohibited banks from providing services to entities dealing with cryptocurrencies. Activity on exchanges immediately picked up.

“There has been a considerable increase in trading volumes on exchanges catering to Indian clients due to the clarity offered by the Supreme Court’s ruling,” said Ashish Singhal, founder and CEO of cryptocurrency exchange CoinSwitch.

Crypto banking services platform Cashaa India noted a spike of 800 percent in trading volumes in the 48 hours following the decision. “The platform also registered a volume of 600+ BTC in the first 24 hours,” said Cashaa CEO Kumar Gaurav.

Back then, Indian traders were in a rush, in large part due to rumors the government would intervene by declaring cryptocurrencies illegal. “Every trader was looking to take advantage of the time window offered by the Supreme Court’s ruling,” Gaurav said. That likely fueled the initial spike in volumes. 

Momentum has remained strong ever since amid host of domestic and international calamities. 

The activity on exchanges further improved after Yes Bank, India’s fourth-largest lender, collapsed on March 6, damaging confidence in the country’s banking system.

The nationwide panic triggered by the Yes Bank crisis worked in favor of bitcoin, boosting Cashaa’s sales at a daily rate of 250 percent to 450 percent, according to data provided by the platform. 

Traditional markets like equities and bonds panicked in March as the coronavirus outbreak gathered pace across Europe and in the United States. India’s benchmark equity index NIFTY 50 dropped by 23 percent in March, while the Indian rupee hit a record low of 77.40 per U.S. dollar. 

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Further, India’s Prime Minister Narendra Modi announced a three-week-long nationwide lockdown on March 24 to contain the coronavirus outbreak. 

However, the sell-off in traditional markets and the curfew haven’t stopped Indians from venturing into cryptocurrencies. “March was one of the best months, doubling the volume from last month,” CoinSwitch's Singhal said. 

The Mumbai-based cryptocurrency exchange WazirX has also registered growth amid the coronavirus crisis. “Signups have increased by 25 percent during the lockdown,” said Nischal Shetty, founder and CEO of WazirX.

Investor interest in bitcoin is likely sustained by round-the-clock trading, in contrast to Indian equity markets, which operate from 9 a.m. to 3.30 p.m. Monday to Friday. Further, it is a decentralized, peer-to-peer, and borderless payment mechanism designed for situations like the ongoing coronavirus pandemic. 

One theory is the longer people can’t go outside to conduct their business, the more useful BTC should become because "it can be sent and received from the safety of one’s home,” Justin Gillespie, CEO of Titus Investment Advisors and bitcoin trader, told CoinDesk.

If the volume growth seen over the past month is anything to go by, investors' interest certainly looks to have picked up. 

“Within a span of 30 days, daily trading volume on WazirX has increased by 60 percent and the exchange has received a total amount of 100 crore rupees ($13 million),” WazirX CEO Nischal Shetty said. 

Meanwhile, cryptocurrency exchange CoinDCX has witnessed a 78.36 percent increase in trading volumes in BTC/INR pairs. “We also had a trading competition that saw 800 BTC volume in BTC/INR markets,” said CoinDCX’s chief executive Sumit Gupta.