Different from other Asian markets, we can see that India has decided to create a regulation that will completely ban cryptocurrency trading. Other countries have chosen a completely different approach. They have decided to regulate the current market and accept all the cryptos as a part of their financial system. So, we can talk about cryptos, mainly BTC as a future concept of money.
In case you would like to take a look at some of the most important points towards this major shift, be sure to take a look at www.econotimes.com. While there’s no official reason why they’ve decided to create a regulation like this, we can see that they opted for this approach. At the same time, we can see that there no way for the government to change its mind.
Before this decision, we can see that the Indian government wanted to introduce its own digital currency. Since this plan failed, we can see that their new approach is widely different from what they initially planned. So, we can see that a lot of traders from this country are not certain about should they start participating in this market. Let’s take a look at what they can expect in the future.
What’s the Impact of a New Regulation?
From many different analyses, we can see that there are a plethora of different impacts this new regulation might have on the people who are interested in trading with cryptos. When you take a look at how big is Indian crypto market when compared to the global market, you will see that it represents 1%, despite this country having the most population in the world, after China.
Surely, this wouldn’t represent too much of a blow to the global market, but it will surely represent a massive blow to the traders from this country. Since this regulation will ban all cryptos, you can understand how much of an impact it will have on its local market. According to some statistics, around 5 million people in India hold, trade, and sell digital currencies, which is a pretty high number. Therefore, you can see how much of a loss it would be.
In the beginning, we can see that people who were against this law pointed out that it doesn’t leave any kind of exit for those who already owned these. In fact, they could be faced with some pretty severe consequences. A ten-year sentence for every person. Just think about 5 million being put in prison in a couple of months, and you will see that this is an impossible mission.
Therefore, law’s creators have decided to provide traders with a chance to get rid of all the coins in a three-month deadline after the regulation passes regulatory institutions of the country in question. At the same time, we can see that there’s still a lot of different uncertainties about the regulation itself, and people have uncertain about what they should do to avoid the possible consequences.
What’s the Backstory?
For you to understand the whole story, you should take a look at the history that preceded this regulation. For almost a decade there have been stories about should India accept digital currencies. In 2013, the government looked for solutions to protect people from all kinds of dangers when it comes to investing in cryptos. They provided the public with all the pros and cons of investing in this concept.
In 2018, RBI decided to ban banks from dealing with companies that are dealing with digital currencies. The reason was pretty obvious. Making crypto transactions doesn’t require the trader to provide personal information when concluding a deal. Instead, they need to provide just the address. So, this difference is what makes the uncrossable barrier for them to do business.
Recently, we can see that the minister of finance pointed out there are some problems that surround the whole concept of regulating this market. So, we can see that this is the reason why the country decided to completely ban the cryptos or to introduce their own crypto. Sadly, we can see that they’ve opted to completely ban them from entering the legal finance market.
Present Regulatory Framework
At this moment, there’s absolutely no regulatory framework in this country. SEBI and RBI didn’t have introduced anything to the public. We can see that there are where some attempts to regulate this field. It all began the moment the prices started to grow back in 2017.
So, the government has decided to take a look into it. A year later, they have claimed that there wasn’t any kind of improvement whatsoever. Therefore, all plans for potential regulation have flunked. After that, there were talks about creating their own crypto, but the whole idea was abandoned, as we’ve already said.
The Status of New Regulation
The new law about how cryptocurrency ban is now prepared and it will be sent to the cabinet who will approve it in the next couple of months.
How is Industry Fighting Against It?
Since the complete ban is on the horizon, we can see that there are people who are battling against the proposed law. Plus, a group of people has launched indiawantsbitcoin.org, a site where they will express all the future actions to battle the proposed regulation.
Plus, they have contacted all the credible places like the finance ministry and presented them with their case. However, we can see that their actions didn’t have so many results so far. But, we do hope that they will be able to make a breach which will mean a positive turn in the future.
So, when someone asks a question about the legality of investing in digital currencies in this country, the answer is not certain at this moment. The reason is that we still don’t know what to expect. The further actions will be much clearer after the bill passes through all the regulatory institutions of the country. Therefore, the proper answer will need to wait for some time.