05 Apr NO BAN ON CRYPTOCURRENCY EXCHANGES, BUSINESSES OR TRADERS IN INDIA
In 2018, the RBI bank prohibited regulated substances from providing services to any individual or business dealing with the digital currencies but the world was overturned by the supreme court in March 2020. There is No Ban on Cryptocurrency Exchanges, Businesses or Traders.
The government is planning to bring with a new law to ban trade in cryptocurrency technology, sources have told Moneycontrol, a turn on that will come as a huge blow to an industry that has been becoming during the lockdown.
India plans to introduce a new law banning trade in the crypto launch, placing it out of steps with other economies that have chosen to regulate the juvenile market.
The bill is unexpected to be discussed easily through the federal cabinet before it is sent to parliament, according to people familiar with the development who were not identified, citing rules on speaking with the media.
The federal government will encourage blockchain technology, this technology underlying cryptocurrency, but is not keen on cryptocurrency trading, according to people. India’s finance ministry spokesman did not respond to calls again and a message with comments.
The winners as court prompted an almost 450% surge in trading at just two-three months since March, according to technical research, concerns as more Indians risk savings, job losses and an economic slowdown worse by the covid19.
The Bitcoin marketplace reported 883% growth between January to May 2020 from around $2.2 million to $22.1 million. Mumbai based crypto exchanger, grew 400% in March 2020 and 270% in April 2020 on a month-to-month basis, according to technical skills.
The millions of dollars worth of business in cryptocurrency is being done every week, with the lockdown pushing up the volumes. The government-industry took inside and then said, was losing out of precious revenue by not coming up with a regulatory mechanism.
A growing number of investors have found refunds in virtual currencies as traditional assets have taken a beating over worries about the economy battered by the outbreak.
As regular traders No Ban on Cryptocurrency Exchanges, Businesses or Traders
India’s take decision will be significant as more Asian nation countries lightly weigh the pros and cons of virtual currencies. China, which banned initial coin offerings(ICO) and virtual currencies in 2017, recently allowed Bitcoin trading as virtual property, not as money. It is also planning its own central bank digital currency. Both Singapore and South Korea regulate crypto trades.
India’s federal government thinks that Niti Aayog is exploring possible uses of blockchains — structures that publicly store transactional records or blocks in several networked databases — to manage land records, drugs supply chain, or records of educational certificates. And while it is planning a virtual currency, the government is averse to the idea of the cryptocurrency trade.
A renewed trading ban could affect more than 1.7 million Indians trading in digital assets and a rising number of companies setting up platforms for the trade, data shows. It will also affect companies like Singapore-based CoinSwitch, which added 200,000 users after starting India operations in June and was reporting volumes of about $200-300 million, according to the chief executive officer.
Impact on banking systems:
It is necessary to analyze the judgment for the possible impact it will have on the banking system and digital currency management of the country. The players in the sector are hoping that the government will consider regulation and not a full-scale ban on trading currencies.
A cryptocurrency is a digital asset designed and developed to work as a medium of exchange. It uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.
No single institution controls the cryptocurrency network. This puts some people at ease because it means that a large bank can’t control their money. But there’s also a flip side to it.
The RBI, in its wisdom to protect the interests of the country, had virtually banned cryptocurrency trading in India through its circular issued on April 6, 2018. It directed that all entities regulated by it shall not deal in virtual currencies or provide services for facilitating any person or entity in dealing with or settling those.
It is incorrect on the part of critics to say the RBI’s approach is ham-handed, driven by the fear of the unknown. While conventional currencies have been backed by gold or silver, digital currency is based on mathematics.
Already, the European Banking Authority and other institutions have warned that bitcoin users are not protected by refund rights or chargebacks. The same is applicable for Indian users also.
Why India needs a crypto revival, not ban
With a significant number of unbanked population in the country, Blockchain has the potential to increase financial inclusion in the country by providing access to digital assets. Finally, from India’s booming Diaspora to the internal migrant labor population – everyone can benefit from a crypto-based system.
South Asia & MENA at Ripple, a technology company that helps send money globally using blockchain, said, “We are confident that after careful deliberation and consultation with industry participants, Indian policymakers will consider the regulatory path and not a ban.
With thoughtful inputs from both the private and public sectors, Indian policymakers can lead the way to provide clear regulatory guidance that can manage and mitigate these risks — ultimately helping Indian businesses, entrepreneurs, innovators, and consumers to benefit from blockchain technologies and digital assets in safe and meaningful ways.