In the past week or so I've been hearing rumours in closed groups of crypto enthusiasts and traders in India of a possible nationwide ban on cryptocurrency trading in 3 months time. This was further corroborated by a source at one of the cryptocurrency exchanges in the country.
This behaviour has pushed a couple of top exchanges from India to register their businesses in Singapore. It's a precautionary move against the worst case scenario coming true. It would allow them to continue their business operations should the government take any stronger measures to curb use of cryptocurrency in India.
As per the latest order from RBI, all entities licensed and regulated by the Reserve Bank of India are prohibited from rendering services to any business dealing in cryptocurrencies. This circular from RBI gives currently operational crypto-exchanges in India 3 months to stop providing and Crypto/INR pair on their exchanges. New exchanges are unable to start operations due to this mandate.
As per the latest report on BloombergQuint
The Central Board of Direct Taxes and the Enforcement Directorate have recommended that trading of virtual currencies like bitcoin be banned in India, an official aware of the development told BloombergQuint on the condition of anonymity. That’s because virtual currencies may be used for money laundering or financing terror activities since such transactions cannot be traced, the official said.
Representatives of the two agencies had raised these concerns at a recent meeting of the committee tasked with developing a framework for regulation of cryptocurrencies. The committee, headed by Economic Affairs Secretary Subhash Garg, also includes Securities and Exchange Board of India Chairman Ajay Tyagi, Reserve Bank of India Deputy Governor BP Kanungo, and representatives from CBDT and ED.
The news report is on point. But at the moment no decisions have been made. Steemit users from India, fear not! You can continue using this platform and holding Steem without any issues.
To Ban Or Regulate?
Not all government agencies are pro-ban on cryptocurrency trading in India. The Department of Economic Affairs wants virtual currencies to be regulated. Indians are the most adaptable people when it comes to circumventing any forced government measures. That's why we have such a huge cash based economy.
If the government imposes a complete ban, the chances of trading moving into peer to peer channels is extremely high. People will inevitably find a way around the ban and make it harder for government agencies to crack down on illicit use of cryptocurrencies in India.
As a avid cryptocurrency enthusiast and investor based out of India I feel that the government agencies such as ED and CBDT should be focused on preventing scams and catching fraudsters in the Indian banking scenario instead of chasing a easy target such as crypto-investors in the country.
What is the immediate affect of this?
None! For the time being there is nothing to worry. You can buy and sell. It's business as usual. Prices are looking better than a week ago. Most exchange prices are now starting to maintain parity with global prices.
Even if ED, CBDT and RBI manages a complete ban on trading I would recommend you to hold on to your tokens and not panic sell them in a hurry. P2P channels will remain as the last arena for trading. Whether the government likes it or not, p2p transactions will be untraceable in majority of the cases.
Such bans are likely to remain on paper and won't be easy to enforce for the government. But it's unfortunate that some government agencies are even considering such a strong move. I'm hopeful that our government will regulate the market and provide us with a legal system of trading in these virtual currencies. But I wouldn't hold my breath on it.
It's Not Over Yet!
Some people are fighting this RBI circular. As reported in my previous post, CoinRecoil is currently challenging the RBI order in Delhi high court. Let's hope they manage to get a stay on the order and other companies join in on this fight for our freedom to use our money as we see fit!
It's important to remain positive and maintain an objective outlook. However, I would recommend everyone to find their own solutions for sustainability in case of a complete ban. Better to be prepared one way or the other.
If you like my work kindly resteem it to your friends. You may also continue reading my recent posts which might interest you:
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