Cryptocurrency ban in India
12 September is going to be a historical day for Indian Cryptocurrency market, as SUPREME COURT postponed its final hearing on Cryptocurrency ban in India from 11th to 12th September.
Overview of the whole Cryptocurrency ban in India situation :
Before we dig to the topic, let me give you a overview, how Supreme Court came into the picture of Cryptocurrency market and why every crypto investors in India is waiting for this hearing regarding Cryptocurrency ban in India.
Back in April,2018, RBI directed all the banks to stop providing services for the Crypto Exchanges in India within 3 three months.
After the deadline of July 6, once -booming industry faced a drastic crash. As an example, one of the crypto exchange Unocoin, based on Bangalore had over 200000 trader in a month, that now dropped to 20000/month.
Not surprisingly, this crypto exchanges bodies dragged the RBI into the Supreme court on this Cryptocurrency ban in India case. Besides the RBI, the Indian government, market regulating body Securities and Exchange Board of India (SEBI), the enforcement directorate, and the income tax department, too, are parties to the case filed by the exchanges.
Here are the total sequences of incidents,
Reserve Bank of India’s Rational on Cryptocurrency ban in India:
As RBI was uncomfortable to deal with the crypto currencies, Supreme court directed the exchanges to resolve the issue with RBI, directly.
RBI wanted to protect the innocent Traders, Investors who may be exposed to scam or sudden intentional price fluctuation .Like when bitcoin loose almost 200 billion market cap within 2 month after hitting the peak in december ,2017 which was pointed in the RBI’s annual report.
As the transactions are anonymous, it is not possible for RBI to track all the transactions to decide, whether it is intended to scam or not. RBI was not only concerned about the money laundering or terror financing, but also it was concerned about the taxation system. Instead, RBI is planning to launch its own cryptocurrency. According to Business Standard, the cryptocurrency will be code-named ‘Lakshmi’ — after the Goddess of wealth .
RBI’s Action :
RBI has also build a team consists of advisories who were warning people against investing in these digital coins. Meanwhile, it formed a panel in December 2017 that is currently studying crypto currencies and ways to regulate them. Cryptocurrency ban in India is not the actual solution,they should a way to regulate them.
Subhash Chandra Garg,secretary in the department of economic affairs, is leading this committee which includes members from the RBI and SEBI.
Read more :
- India’s top court refuses to lift ban on cryptocurrency exchanges
- Cryptocurrency Virtually Outlawed in India as Top Court Backs Ban
Arguments from the Exchange on Cryptocurrency ban in India :
The virtual currency exchanges have challenged RBI on this Cryptocurrency ban in India case and dragged them in to the court on the basis of two points.
Base of the Case :
1st Point :
The article 19(1) (g) of the Indian constitution that allows citizens to enjoy the right to carry on any occupation, trade, or business,
The article 14 that prohibits discrimination and mandates equal protection under the law for all.
Exchanges Explanation :
The exchanges said that it already following proper KYC, Know Your Customer and anti-Money Laundering guideline that helps authorities to track down the transactions. Due to this crackdown, a large part of trade has shifted its operation to cash transactions, which is mostly illegal.
The exchanges are willing to make their system more strict so that they can track down every transactions to be compliance with the RBI rules and regulation but Ban is not a solution. They believed that all the concerns that RBI have is also applicable for any kind trading business but Cryptocurrency ban in India is not the permanent solution.
Word from few Crypto Exchange CEO’s :
One of the CEO of a cryptocurrency exchange had told QuartzIndia earlier ,
”For instance, in order to run certain computer programs, you can pay using ether. Moreover, as the market matures and more people and institutions start using it, there can be more use cases that can boost its intrinsic value”
However there is something different also going on to bypass the RBI’s ban on money transfer to Crypto exchanges through banks.
A number of Indian crypto exchanges have come up with a methods to allow its users to deposit and withdraw Indian rupees. Among them are Wazirx, Instashift, and Coindcx exchanges which are now performing their operation on the exchange-escrowed peer-to-peer (P2P) model.And according to them this new model is attracting investors and the rate of transactions has also increased.
Wazirx’s CEO, Nischal Shetty, told to news.Bitcoin.com
“The SC hearing is not the end of the road but the beginning of the crypto journey in India…If the outcome is positive then it will definitely boost trading volumes. If the outcome is negative then I don’t think there would be much impact on the existing trading volumes.”
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Rahul Chitale, CEO of Instashift, told news.Bitcoin.com
“The ruling will surely have some bearing and the SC’s views will shape a lot of the regulatory thinking, but it’s unlikely to have an immediate tactical impact.Crypto will continue to thrive regardless of the government view, like we have seen worldwide. Any ruling which forces the government to precipitate taking a view on this will only benefit crypto in India in the long run.”
Sumit Gupta, CEO of Coindcx, explained to news.Bitcoin.com
“All Indian exchanges and crypto traders are eyeing the SC ruling.Indian traders will eventually find ways to invest in cryptocurrencies via some innovative channels..A negative ruling will just shift users to P2P trading platforms.A positive ruling will boost crypto trade in the Indian market like we have seen in Q3 of 2017 and we will see lakhs of new users joining exchange platforms and volumes can shoot up even higher than it was before in the next bullish run”
So end of all , today is the day which will decide the clear road map for crypto investors and crypto Exchanges on this whole Cryptocurrency ban in India argument.
Personally ,I think Supreme Court will give the verdict in the favour of RBI’s guideline. It is petty clear that the Central government is intentionally banning the transaction of INR to the Crypto Exchanges through banking system so that they can create pressure on Exchanges and can start negotiating with them to regulate the Crypto Bodies under the Taxation system. Strategically government is not banning the cryptocurrencies fully as ” Cryptocurrency ban in India ” will be foolish decision. Banning Cryptocurrencies means, a billion dollar business will move from Indian market to outer world.
News18 Tweeted regrading Cryptocurrency ban in India on 12, Sep
RBI files a affidavit in Supreme Court for Cryptocurrency ban in India ,
We will update the article if there is any new update on Cryptocurrency ban in India. Continue reading the article in HangingPost.com and user the Chat Master in the left corner for any kind of assist…….