As much as India has an interesting relationship with blockchain, there are so many things creating tension in the country when it comes to cryptocurrencies. On the one hand, the Indian government strongly supports blockchain technology and as a result, more than half of the states in the country are already operating blockchain projects, which have been initiated and sponsored by the Indian government. On the flip side, the Indian government isn’t as positive when it comes to cryptocurrencies themselves. As a result, they have set strict regulations in an attempt to control the growth of these digital currencies in the country.
Last year, in April, a significant blow fell on the people of India. This came after the country’s central bank, the Reserve Bank of India (RBI), issued a ban that prohibited all the banks from receiving or making any transaction related to cryptocurrencies. As a result of this, the people in India could no longer cash in their cryptocurrencies. In addition, some of the country’s top crypto exchanges, such as Zebpay and Koinex, had to shut down their operations. On the flipside, some companies, such as WazirX, used the new ban to navigate their way to other options, including alternate peer-to-peer exchanges.
As though this was not enough, more problems are now facing the cryptocurrency market in India. In July of this year, a committee, that was appointed by the Indian government, proposed a blanket ban on cryptocurrencies in the entire country. In addition, they recommended that major fines and penalties be charged on any crypto related activities. These recommendations are currently in the form of a draft law and it will now be moved to the Indian Parliament for further discussion. In case these recommendations become law, it will be the end of cryptocurrencies in India.
Fighting For Cryptocurrencies
Despite the pressure against cryptos in India, there is a large group of people and organizations fighting against the trend. The Internet and Mobile Association of India has already filed a petition in the Supreme Court regarding the RBI’s banking ban. Their petition argues that the RBI can only set such bans if there is a legislative policy regarding cryptocurrency already in place.
In addition to the petition against the Reserve Bank of India, there is a large group of people from the cryptocurrency community fighting against the proposed legislation in the Indian Parliament. These groups of activists and players in the country’s cryptocurrency market, want to rethink the regulations being presented in the country. That is, due to the decentralized form of cryptocurrency transactions, it is evident that it will not be easy for the government to control what is happening when it comes to digital currencies and transactions.
The view is that the presence of a blanket ban will lead to more illegal activities due to the way transactions take place. As a result, it will shift the transactions to a gray market where people will involve themselves in fraudulent transactions. Many will also fall victims to these types of activities.
As a result of the potential negative outcome, these activist groups in India are recommending that the presence of positive regulations will have a different impact. That is, instead of a blanket ban, positive regulation would make more sense and would be more beneficial for the government and the people of the country. The government will then be in a better position to monitor any illegal activities and to collect revenue.
The next argument from the activists’ group is that the Indian government will find it challenging to support and promote blockchain technology if they impose a permanent ban. With blockchain growing so fast, it is becoming an inevitable trend that will be adopted eventually.
The fact is, there is substantial public support for positive regulations on cryptocurrencies. A very high and growing number of Indian people support blockchain technology and want the Indian government to set positive rules instead of simply banning these digital currencies. Many social media campaigns have also been launched on the same.
The big question now is will the people in India succeed in convincing the government that cryptocurrencies are an important part of the future financial landscape?