India's bitcoin and crypto ban - my take on the road ahead for India
In a positive update, the High Court of Delhi has issued a notice to the Reserve Bank of India after an appeal was recently made against the central bank's ban on banks facilitatinfg crypto transactions.
"Reserve Bank of India had recently asked all the regulated entities, including banks, to stop from providing services to any individual or business dealing in digital currencies. The central bank had given three months to banks to end all existing relationships with bitcoin players."
Yesterday, I also resteemed an article that stated that RBI was also considering an outright ban on cryptocurrency trading.
The high court notice is very positive for a number of reasons -
- it gives people hope that the current ban on fiat gateways may be overturned
- it delays any decision on an outright ban on cryptocurrency trading in the country
- it may prevent the rbi from making stupid autocratic decisions in the future
Given the lengthy nature of cases in India, this may be dragged on for long so there may be light at the end of the tunnel but it is going to be a long dark one. And if the outcome is not in favour of crypto exchanges, then it will be appealed in the highest court. Its a long road ahead.
I have my doubts that india will come up with any regulation around crypto trading. Financial markets in india are extremely underdeveloped. We dont yet have a fully functional debt market, therefore a regulated crypto market is out of the question. With most people in govt. and power residing in the "blockchain good, bitcoin bad" camp and this year being the penultimate to national elections, cryptocurrency regulation is going to be the last thing on anyone's mind.
What we may see is a black market for cryptocurrency develop where otc transactions start happening. The general public will not be able to learn about it or invest in it and India will miss the 2018 and 2019 crypto adoption phase. Terrible for a country where people need an alternative to banks. The banking system in India is on the verge of a collapse and will need a bailout from the taxpayer. Some with access to foreign bank accounts or friends and family abroad will be able to access this space but for a majority, it will be a missed opportunity.
What do you guys think? Does a country with 16% of the world population need crypto adoption? Let me know in comments and share the article if you share the concern.