The supreme court in India has issued a deadline on the government to take a definite stand on cryptocurrencies rather than the RBI’s ban that prohibits banks from engaging in crypto-related activities.
This is an issue that has lingered since April 2018, with various consequences, especially on the cryptocurrency exchanges and startups. Mostly affected are those cryptocurrency establishments that are located within the shores of India, representing one of the most populated and technologically inclined nations.
The impact of the ban was felt across the entire cryptocurrency ecosystem. It also coincided with the prominent downward movement of price of bitcoin and other cryptocurrencies. This development at the time raised a few questions as to how significant is the role of the Indian market in the crypto-world.
Existing Ban Is Not Effective
Founder of Cashaa and chairman of Auxesis Group, Kumar Gaurav acknowledges that even though cryptos have been successful in finding space in the economy of most countries, others exist where its use is yet to be legalized. This includes the likes of China, and one of the world’s fastest growing economies, India, where the actions of its apex bank has been enumerated.
Surprisingly, this ban least affected the cryptocurrency ecosystem at a global level in the long run. However, it demotivated the average investor in India. Indian Banks were directed to restrict their involvement with crypto-exchanges. Gaurav notes that the said ban was not even effectively executed because exchanges frequently changed their bank accounts whenever any of their dealings were restricted by banks.
India with a population of over 1 billion people has been on something of an economic renaissance in the last few years. In a short span of time, cryptocurrency exchanges began to spring up within the country. Gaurav explains that besides, emerging as a source of employment, pioneers like Cashaa OTC, BtcxIndia,Unocoin, Coinsecure, Zebpay, e.t.c. have been offering cryptocurrency exchange and trading services in India.
Government Knows Her Limits
With the proliferation of crypto trading and exchange platforms, the crypto market in India has grown from its modest level in 2013 to the present scenario. Thus, it is acceptable that in the forthcoming years cryptos will make noticeable space in the Indian-market.
Although there is the need for clarification in operational terms for crypto-based establishments, the existing ban by RBI doesn’t seem to be much effective. According to Gaurav, the reason for this is because government officials are aware of the fact that having a real control over the flourishing crypto-market is not easy. This market is spreading at a faster reach, making it nearly impossible to have a grip over its expansion.
Considering possible outcomes and eventualities, Gaurav yet explained that it can be assumed that if the ban is lifted, people will be able to get more exposure to the crypto-trading and will be able to benefit from it.
However, if government decides to impose taxes on the profit made through cryptos, then it will be an additional source of revenue generation. On the other hand, if this ban is not lifted, then illegal transactions like terrorism funding, human trafficking, etc can be checked, provided government implement best methods to have full control over it.