India's Crypto Crackdown

With negative dispositions towards the digital currency ecosystem surfacing in March, it was not of total surprise to hear about the crackdown on cryptocurrencies in India this morning.

“It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling virtual currencies. Regulated entities which already provide such services shall exit the relationship within a specified time. A circular in this regard is being issued separately,” the RBI said in a statement.

This statement is a firm declamation from the central bank of India (RBI), indicating that they will inhibit interaction from RBI regulated entities with companies, or individuals, dealing with digital currencies.

This is an extremely aggressive stance from a major player in the world economy. However, India itself makes up fairly negligible trading volumes. This type of crackdown from a governing body hasn’t been replicated by another large nation other than China. With the recent support for the industry by key nations, such as the United States, Japan, and South Korea, it comes as a surprise to us that they would take such drastic measures.

Stifling a budding industry with the traits of digital currency tells us that governing elite in India are either trying to protect their citizens from the potential rampant scam or illegal activities that is often associated with cryptocurrency, or they see the trend developing of a decentralized power structure that may weaken their financial stranglehold of their population.

We side with the latter. Either way, it is our belief that governmental barring entry to this space will only push citizens of India to find alternate methods to participate in the ongoing financial revolution.

Read the official press release here: https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=43574