Indian Government In Flux: To Ban Or To Regulate? Enforcement Agencies Recommend Ban On Trading Cryptocurrency!
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:
- Steem.Chat Contest #22
- Why You Should Vote For @firepower As Witness—Witness Campaign Post From India!
- Cryptocurrency India: An Update Regarding Reserve Bank's Ban & Link To Petition!
I am pretty sure this ban won't do any good and they have to take their ban back. Cashless economy is not possible if we are afraid of welcoming the new technology only due to some minor faults in it. Instead of banning RBI should focus on regulations and teach the people about it to avoid money laundering.
This will get worse once the RBI ban on crypto transactions via banks comes into effect after 3 months. It's in India's best interest for the RBI to continue allowing crypto transactions via banking else cash usage will shoot up, which may ultimately result in hyper inflation. When people cannot do bank transfers, they'll resort to cash to buy/sell crypto, then they have to print more money which will turn India on the verge to become next Zimbabwe, where once 100-trillion-dollar Zimbabwe note was worth just 40 U.S. cents.
Exactly, my thought also.
Thank you for sharing the news and your personal views. You talked about P2P channels, more details about them would be highly appreciated if the time really comes.
You said that some govt agencies are pro-ban and want to ban every cryptocurrency, then that would include Steem/Steemit also. Then won't they ban all such sites like Steemit?
I don't understand the Indian's governments beef with cryptocurrency.Surely they should know the advantages trading cryptos will bring to the country and the opportunities that can be tapped by the population.To my Indian friends don't despair the government can't fight the winds of change no matter how hard they try.
India and all other countries have taken an initiative to include the field of (KYC) in cryptocurrency buying and selling wallets. Meaning everything you buy and sell can be tracked. So, there is no reason for india to ban cryptocurrencies.
Yet some of them like bitcoin etc can be banned because they are just a cryptocuurency.
Ethereum wont be banned because it is a smart contract platform. And it has changed the world of information technology a lot. So to conclude if you choose to invest in Ethereum, you’ll definitely profit.
And as Ethereums value is increasing slowly. It is the right choice to buy, invest and trade in Ethereum.
“Initially the discussions with the government were purely educative and now it is trying to understand with a direction in mind to figure out how to prepare a framework and policies around it,” said Nischint Sanghavi, head of exchange at Zebpay, a virtual currency trading platform. “… we are hopeful that there won’t be any knee-jerk reaction from the government.”
Thanks for the update sir.
I don't think nor believe that banning cryptocurrency in India would be the solution to money laundering, they should be focus on other thing and leave the only means that give common man hope for a living.
Many lives have become better as a result of introduction of cryptocurrencies, and many more are still getting better, putting a ban on it would make life difficult for the common man....
Everytime our government officials spoke about the slogan of digital India, skill India etc, but when time comes they step back their foot. The political system don't understand properly about the importance and benefits of cryptocurrncy market for a country. In stead of banning if they regulate it properly, it will become a great boost. But who teach the kids, let's see what happens in future, I believe in the notion where there is will there is a way. So be careful and alert friends,do what the time demands. Thanks for sharing such a valuable information @Firepower we are always optimistic .Wish you good luck and good health and happiness.
Why India again Indian?.
Well the rich entities knows if they allow Cryptos flow, the poor one may not lack anymore so they won't ever support crytos
is India also requiring biometrics to do financial transactions?