Also Read : Crypto Salaries gains worldwide regulatory recognition
Also Read : Crypto Salaries gains worldwide regulatory recognition
Job growth amid an "unprecedented" economic slowdown
Rajiv Kumar, vice president of the Indian policy expert group Niti Aayog, said last week that the Indian government faces "an unprecedented situation." He explained that "in the last 70 years, no one had faced this kind of situation in which the entire financial system is under threat." According to Reuters, economists predicted earlier this week that, in the second quarter of this year, the Indian economy probably expanded at its slowest pace in more than five years.
The slowdown has led to many job losses in various sectors, particularly in the automotive industry. The Prime Minister of the Indian state of Rajasthan, Ashok Gehlot, informed the press last week that almost all sectors of the country are struggling, with thousands of thousands of people losing their jobs. Parliament member Manish Tewari, the spokesman for the political party of the Indian Congress, estimated that more than three million rupees (30 million) face the threat of becoming unemployed.
Nischal Shetty, CEO of Cryptobag Wazirx, believes that job growth is one of the main benefits that cryptography can help the economic situation in your country. Kunal Barchha, co-founder of the Coinrecoil crypto bag, shares the sentiment:
Indirectly, cryptography can help create incredible applications that can contribute to good business and that can boost India's overall IT industry and add new jobs for the young generation.
According to the job search site In fact, the cryptocurrency and blockchain market is still "growing rapidly." The company found that the proportion of work publications in the United States related to cryptography, blockchain, and bitcoin has grown by 90% over a one-year period ending in February. Earlier this year, the company revealed that Bengaluru was the number one city in India for encryption work, followed by Pune, the second-largest city in the Indian state of Maharashtra.
Creation of wealth and aid to the unbanked
In addition to job creation, there are other benefits that cryptography can offer the Indian economy. Among them it is attracting "new foreign venture capital investments in new Indian companies, that "ICOs can be a new global fundraising mechanism for new Indian companies in the early stages. ". According to data, the total amount of funds raised worldwide at ICO so far this year exceeds $ 346 million.
Waxirx CEO added that cryptocurrency can help remittances in India be "cheaper and faster." Trading Economics data shows that remittances in India were $ 12.6 billion in the first quarter. He also believes that cryptocurrency can offer the "Opportunity to deposit in the bank the more than 300 million unbanked people in India." The Indian government's own data shows that, as of February 13, the number of accounts opened under the PMJDY, the financial inclusion administered by the government program, was Rs 34.43 million.
Barca, however, has doubts about how much cryptocurrency can help the Indian economy. He opined: "I personally do not." I don't see cryptocurrencies playing any leading role in the Indian economy, not in the next 5 years at least. "
Negative effects of the crypto ban
Currently, the Indian government is deliberating on a bill to ban cryptocurrencies. It was drafted by an interministerial committee (IMC) headed by former Secretary of the Department of Economic Affairs Subhash Chandra Garg, who was recently reassigned to the Ministry of Power. The committee was established on November 2, 2017, and only met three times before finalizing this bill. However, the community is confident that the bill is flawed and has been campaigning tirelessly to convince lawmakers to reexamine IMC recommendations.
The short and long term effects of the cryptocurrency ban in India. In the long run, he explained that "India will see a massive brain drain," as qualified citizens move out of the country to look for opportunities elsewhere. Bahrain, for example, has already been courting new Indian companies to.
The Wazirx executive, emphasizing that the country can "lose billions of dollars in investments that the crypto sector can potentially attract.
Indian citizens will lose hundreds and billions of their hard-earned money ... India will lose thousands of jobs that would otherwise be generated if the crypto sector was positively regulated.
Damage to legitimate players
Whether in fiat currency or cryptocurrency, "illegal activities, money laundering and terrorist financing are the main concerns for the government of India," said Barchha. "From now on, each exchange allows trade after rigorously verifying the documents," he described, and stated that "a ban will result in [the] closing of all exchanges and will not result in the accountability of the transactions. " with illicit intentions they will ... treat cryptography using their own network, "explaining:
Indirectly, the Indian government will increase its headache by tracking illegal transactions, which would have been easier if strict exchanges based on KYC are regulated.
On the other hand, he said: "honest traders or investors will not abandon their faith in technology and trade in cash through peer-to-peer portals." They will not pay any tax for these transactions, which is an additional loss for the government. "
Recently, the National Indian Association of Software and Services Companies (Nasscom) expressed concerns regarding the proposed ban on crypto assets in India. The association describes itself as "the main body for the 154 billion dollar BPM IT industry in India," which "links with the government and industry to influence a favorable policy framework." Nasscom stated that "a ban would inhibit the creation of new applications and solutions deployed and discourage new technology companies" and "would also harm India to participate in new use cases offered by cryptocurrencies and tokens," emphasizing:
A ban is more likely to deter legitimate operators, since they do not intend not to comply.
In his open letter to the Indian finance minister, Sohail Merchant, CEO of the local cryptobag Pocketbits, wrote: “If the ban goes into effect, the black market will continue to thrive. It will be the common man, the compliant companies and the innovators that build on these protocols that will be affected. ”
Hearing of the Supreme Court, a petition withdrawn
There is already a banking ban in India, imposed by the Reserve Bank of India (RBI) in its circular issued in April last year. The ban came into force 90 days later. Several industry participants filed petitions for appeal that challenge the ban, which India's supreme court was originally going to hear in September last year, but was continually delayed. The wait has caused some operators to close their local exchange operations, including Zebpay, previously one of the largest crypto exchanges in India, Coindelta, Coinome, Koinex and Cryptokart.
During the August 21 hearing, the supreme court ordered the central bank to respond to representation through encryption exchanges. that the document was submitted by the Internet and Mobile Association of India (IAMAI) sometime last year. "It's basically a set of suggestions that IAMAI had sent to the RBI. Things like exchanges following the policies of KYC and AML, etc.," he said. "The objective was to convey the fact that there are better ways to guarantee investor protection. and prevent malicious activities in crypto. "
Coinrecoil, the first company to challenge the RBI ban in court, recently withdrew its petition for a car. "Yes, we withdrew our request last week," Barchha confirmed. “Despite being a startup, we decided to take the risk and we became the first exchange in the country to present the petition. We did our best to stay until the end of the fight. But regardless of our passion or trust, at some point, money is important. "
According to Barchha, the financial burden was the only reason why his startup with limited funds withdrew his request. “Most of the investment was made by three directors, friends and family. That was enough to build the exchange from scratch and make it operational.