The ban on cryptocurrency trade in India could soon be a reality, and it’s indeed disappointing for everyone.
While countries such as Japan, Malaysia, Singapore, China, Spain, Germany, the Philippines, the U.S., and more are embracing cryptocurrencies by regulating its trade, India might just choose to stay behind in this race.
Well, the Indian federal government plans to propose a new bill which will ban all kinds of cryptocurrency trade.
This news comes from sources who are familiar with the development of the same and have chosen to stay anonymous while spilling the beans to a media outlet.
They also mentioned that this bill is going to be discussed shortly in the federal cabinet meeting before it gets sent to the parliament for its final approval.
It’s awkward as it sounds that the Indian federal government is all up for encouraging the use of blockchain technology which supports cryptocurrencies but isn’t interested in regulating cryptocurrency trading under any circumstances.
In the year 2018, after a string of fraudulent activities related to crypto, the Indian central bank moved to place a blanket ban on transactions related to cryptocurrencies. Cut to the later that year in September, cryptocurrency exchanges against came under heat as it faced a lawsuit in the Supreme Court which it won in March 2020 and received some much-needed respite.
According to TechSci Research, after that particular win, a surge in a whopping 450% in trading was observed in just two months since March.
WazirX which is a crypto exchanger based out of Mumbai saw a humongous growth of 400% in March and 270% in April on a month-on-month basis due to the same as well.
But, soon that ended in dialling up the concerns of authorities as they viewed it as a means of immensely risky investments and thus the federal government is once again adamant on shutting down the crypto trade.
Crypto Trade Regulation: India To Be Left Behind?
As mentioned in the beginning, if the new Cryptocurrency bill goes through, there is no doubt India will lag behind many other countries which have decided to regulate crypto trade instead of fighting it off.
In 2017, China, which happened to ban initial coin offerings and virtual currencies, recently turned to allow the trade of Bitcoin as virtual property. Besides that, they are also planning to launch their very own centralised digital currency as well.
Countries such as Singapore and South Korea have also decided to join the bandwagon of regulating crypto trade along with Japan. Malaysia too has followed suit and has moved to approve a crypto exchange operator while undergoing nationwide lockdown due to COVID-19. But that being said, all is not lost for India.
Niti Ayog which is India’s federal government think tank, for quite some time, has been exploring possible usages of blockchain such as storing of transactional records publicly.
There’s no doubt blockchain, which powers cryptocurrencies, definitely has the power to bring about many positive changes in the country. It can help add transparency when it comes to managing land records, pharmaceutical drugs supply chain or records of educational certificates. But, as for trading in cryptocurrency, it is safe to say it will take India a considerable amount of time to wrap its head around it.
Crypto Trade Ban To Affect Growth Companies In This Space
The ban on Cryptocurrency in India will directly affect more than 1.7 million Indians who are currently trading in digital assets along with numerous companies who have been busy trying to set up shop in India to facilitate cryptocurrency trading.
CoinSwitch, a Singapore based trading platform that has started their operations in India in the month of June, saw trading transaction value close to $200-$300 million, according to Ashish Singhal who is the CEO. However, now with this ban looming over their heads, the future seems bleak.
These companies have indicated that state-owned banks have long been reluctant to work with them in order to set up proper regulations and this is why the situation has further aggravated and stands where it currently does.
Now, if the bill on banning cryptocurrency trade will be passed and see the daylight is something everyone needs to wait and watch out for.
What is your take on the the possible ban on cryptocurrency trading in India? Do let us know your views in the comment section below.