June 9, 2023

The healthcare industry has always been the first to adopt new technologies and focus on innovation to improve clinical treatments. Innovation in patient care continues to be a primary priority, but the industry falls behind in the use of technology-enabled solutions for daily operations and financial procedures. However, the usage of digital technologies and blockchain technology to improve end-to-end healthcare operations has increased dramatically in the last few years.

With digital transformation, blockchain-based crypto is not just a buzzword anymore. It is becoming an important financial asset. Globally, India ranks second in terms of crypto adoption, and the number of crypto users across the country is continuously growing. While crypto is mostly for investing and trading, crypto assets, especially Bitcoin are being used as a new payment method across the globe.

Crypto is emerging as a new-age payment mechanism

In the last few years, crypto payments for goods and services have gained momentum. It is emerging as a modern payment method globally. In contrast to traditional payment mechanisms, crypto payments allow 24/7 access and borderless immediate transactions. It has led to massive interest from the financial service sector. In fact, leading enterprises like Starbucks, PayPal, Microsoft, and Burger King, to name a few, have started accepting crypto payments in different parts of the world.

Despite the rapid adoption of Bitcoin payments by various multinational corporations, some sectors, particularly the healthcare sector, remain reluctant. This is driven by financial ambiguity surrounding crypto assets. Furthermore, crypto as a form of new payment method has witnessed a slump in India over the last year.

The current state of crypto-related regulatory arbitrage in India

The rising popularity of Bitcoin has resulted in the creation of over 18k new crypto assets. Since its introduction into the financial markets, there has been debate over whether it should be classified as an asset, equity, or commodity. While US regulators have termed crypto assets like Bitcoin a commodity, its entity remains ambiguous in India. Last year, almost all crypto payments were frozen across India when United Payments Interface, a central bank’s entity system claimed that it was not aware of crypto being used for peer-to-peer, inter-bank and person-to-merchant transactions. It turned out to be a heavy blow for the companies supporting crypto payments.

Furthermore, the RBI has expressed its concerns about crypto over the years due to its lack of legal status. On the other hand, the government has hinted at classifying cryptocurrency on multiple occasions. In fact, the Finance Minister stated that the government intends to levy a tax on crypto transactions. In the absence of any clear regulations on crypto payments, there still remains ambiguity around it.

The road ahead

Crypto, particularly Bitcoin, is rapidly becoming a globally accepted mode of payment. While the RBI or NCPI has not issued a formal statement regarding its legal status, institutional participation in cryptocurrency has been impacted. In recent years, the healthcare industry in India has embraced various forms of digital payment. However, the sector hasn’t accepted the new-age crypto payment method yet. As we move ahead, the use of Bitcoin and other crypto-assets for financial transactions will be primarily governed by RBI regulations.



Views expressed above are the author’s own.