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What is going on in India after RBI’S ban on Cryptocurrency?

After RBI’S ban on Cryptocurrency, a kind of fear, uncertainty, and doubt (in crypto terminology known as FUD) is going on among the crypto community. On 5 April 2018, finally Reserve Bank of India issued a guideline and clearly stated that RBI will not allow regulated financial institute like Banks payment service providers and non-banking finance companies (NBFCs), to provide services to persons or businesses that deal with cryptocurrencies. Somewhere the decision is huge because directly or indirectly the decision is affecting 2% population of the country, who deals in cryptocurrency.

Why Reserve Bank of India adopted such drastic step? Prior this step, Ministry of Finance issued several warning and clearly stated that Cryptocurrency and initial coin offering is the game of highest risk, so the government doesn’t recognize it as a legal tender. Following are the reasons that forced RBI to adopt such drastic step. Ponzi scheme: Since cryptocurrency is not controlled by any central bank, so no law enforcement agency can see what actually happening and how people are using it. So the market of fraud and Ponzi scheme was growing. Recently, Police arrested two brothers Amit Bhardwaj and Vivek Bhardwaj on 4 April 2018. They both were accused of scamming about 8,000 investors out of ₹2,000 crore. Apart from that, they both were running an ICO initial coin offering, which was investment scheme Gainitcoin that promised investors, guaranteed 10 percent monthly returns within 18 months. Crime: People were using cryptocurrency for Drug trafficking, prostitution, terrorism, money laundering, tax evasion and other illegal and subversive activity. The threat to market integrity: Since the cryptocurrency is volatile, so it was a threat to market integrity and financial stability. Government’s main concern was that cryptocurrency can challenge to regular fiat currency if it is regulated.

What is going on with Crypto in India?

After such drastic step, definitely, there is huge disappointment among the crypto community in India. Cryptocurrency users in the country filed a Petition against RBI’s crypto ban. Apart from that, an online signature campaign is going on to support the Blockchain and crypto sphere. The veteran tech investor Tim Draper said that the Indian government did a huge mistake and this will lead the country to brain drain. The two leading crypto exchanges in the country ZebPay and Unocoin are continuously informing their users via apps and email. An update from ZebPay after RBI’s ban:

We remain committed to keeping customer fund and asset secure and are exploring various options. However, a sudden disruption in banking services could affect our ability to service deposits and withdrawals, until banking services are restored. An update from Unocoin after RBI’s ban: “We just want to assure you that your funds (INR, BTC and other cryptos) are absolutely safe with us as ever and there is no need to worry about their safety. As always, you can still continue to use our platform as before and if need be you can still withdraw your funds. As on today, no banks (that we are working with) have issued any notice to us and when they do and if it has an impact on you and /or us, we will surely communicate to you.” Shivam Thakral the CEO of BuyUCoin said that “We have to move our company to some foreign country where regulations allow opening of bank accounts plus we won't be dealing in fiat currency. It will become a global operation rather than an India centric operation.” Navin Surya, Chairman of the Payment Council of India referring to the RBI decision told, “Risks exist in every system but we have solutions to each of those. So why not work with virtual currency traders in a similar way and create a risk-free system rather than indirectly shutting it down.”

The consequence of banning Cryptocurrency in the country: After such drastic step, it is not difficult to guess the future of Cryptocurrency in the country. From such decision, we can see government’s double standard approach. One side government is against the potential of cryptocurrency and ICO initial coin offering, other side government is exploring the potential of Blockchain technology. In any aspect this decision is not justified, it shows our system’s hypocrisy. Such extreme decision not only kills the curiosity of emerging and talented brain toward technology like Blockchain but also close the opportunity of employment and skill. In upcoming year we can see the following consequence: Brain Drain: As Tech investor Tim Draper already said that this decision will lead India to Brain Drain. Because when Blockchain and crypto enthusiast will not get favorable environment definitely they will force to leave the country. Even some crypto exchanges are planning to leave the country. Somewhere government is again doing a blunder, as did during dot-com boom. Many Indian who don’t find ideal environment for this technology, finally shifted to country like USA or Germany resulting huge Brain Drain from India and the rest is history.

And this can happen in case of crypto exchanges. The successful crypto exchanges in the country like ZebPay and Unocoin can easily shift to Singapore, Malta, and instead of serving in a particular country, they can serve globally. India will be left behind in the race of Blockchain technology Cryptocurrency is directly related to Blockchain technology. People who want to understand this technology, the easiest way for him/ her is to have a first-hand experience of dealing with BTC or ETH like currencies through exchanges in India. But when the government does something like this, it kills serious talents. Blockchain is new in India, and the government is exploring its all possible area of usage. So when the government adopts such drastic step, it becomes bottlenecks for the techies. In such scenario emerging entrepreneurs, want to explore the possibilities of new technology will not enter in this sector due to fear, uncertainty, and doubt; resultant India will be left behind in the race of Blockchain technology.

What is the option from here?

Already a petition has been filed by the crypto community in the Supreme Court against RBI’S ban on cryptocurrency and decision will come within three months. Definitely, this is a mighty blow for the crypto community in India, but all options are not closed. Following thing you can do, no matter whether cryptocurrency is a ban or not supported by the government. 

Now while writing the article the price of Bitcoin in India is lower than the international market. Now 1 BTC= 7997.07 USD (As per Indian Market) and 1 BTC= 8109 USD (As per international market). So one can easily make use of this arbitrage opportunity, no matter whatever the government says. RBI is against the cryptocurrency, not against the US dollar. So in future, if you need some INR, convert your BTC into USD, and then convert USD to INR. As simple as that. You will found various online options, where you can trade Cryptocurrency without any hassle.

Conclusion: When only 2% of the population is indulged in cryptocurrency, definitely banning is not a solution. Rather a rethink at the highest level needed. The emergence of the cryptocurrency is the beginnings of a new era, so any government cannot ignore or stop it. So it will be better to form a proper taxation system on cryptocurrency, thereby people who are interested, can trade and invest easily.

“Disclaimer: All the information in this article is taken from external sources available on the internet. We can't say information in this article is 100% reliable or not. You can do your own research while taking any decision related to crypto currency.�

What is going on in india after rbi’s ban on cryptocurrency  

After RBI’S ban on Cryptocurrency, a kind of fear, uncertainty, and doubt (in crypto terminology known as FUD) is going on among the crypto...

What is going on in india after rbi’s ban on cryptocurrency  

After RBI’S ban on Cryptocurrency, a kind of fear, uncertainty, and doubt (in crypto terminology known as FUD) is going on among the crypto...