Education
Crypto Market Legislation Sluggish Adoption Amid RBI Approval
The removal by India's central bank, the Reserve Bank of India, of a blanket ban on cryptocurrencies in March was a reward to India 's booming crypto-industrie – with modern exchanges beginning to be a trigger.
This is given the fact that the nation is one of the most severely impacted by the pandemic of COVID-19, which has contributed to an worsening economic downturn in the world. Cryptocurrency and blockchain technology have proven a much-needed relief in these challenging times for both investors and fintech innovators.
Uncertainty in regulation
The removal of the ban was not the most hoped-for option as banks refusing to accept crypto transfers even after the abrogation. However, the sector now has greater regulatory certainty than it did in 2017 when the degree of uncertainty and ambiguity was strong.
There was a report of a notice being submitted in the Ministry of Finance for review in the Ministry of Finance in relation to an intra-departmental draft legislation to prohibit any practices related to cryptocurrencies — severe penalties or even jail sentences for criminals of up to 10 years — but recently dismissed it.
AKM Global, a global consulting company, said that if the legislation was enforced as it is, the cryptoindustrie in India will be totally decimated. This report brought the Crypto world doubts again. Nevertheless, Nischal Shetty, the CEO of WazirX crypto-exchange, retains trust in the government and tells Cointelegraph via e-mail.
The day the "note" news broke out, the community created a certain panic. But this is all. But that is everything. Since then, we have no difference in WazirX 's trading behaviour. Crypto prohibition has been suggested in the past too. I am sure our Prime Minister is not going to let us down, with over 5 million crypto consumers in India.
There should be a dedicated government body regulating this industry without which the regulation of cryptography in India is impossible.
Bank reticence
Apart from the RBI, some private banks are reluctant to process crypto-transactions for different companies in the industry. There is, however, widespread speculation as to why this is; it could simply be an absence of industry understanding and knowledge as seen with governing bodies. However, deeper interest conflicts could occur here. Banks will always be against this industry globally, Sogani says, because if crypto is implemented, P2P transactions will eliminate the need for banking third parties.
From a more positive point of view, the skepticism of the bank could also only depend on the limited circumstances which, according to Sogani, the governing bodies like the RBI have maintained a lack of regulatory clarity:
"India 's banks are not sure how Bitcoin transactions should be handled. You obviously don't want to dirty your hands when crypto regulations don't exist. Furthermore, RBI did not remove or issue a new circular telling banks to re-enter into work with the crypto companies.
However, in answer to a request for information submitted by Harish BV, a co-founder of Unocoin Local Crypto-Monetary Exchange, by the end of March, the RBI stated clearly that banks that provide accounts to crypto companies and individual traders are not restricted. That was the big statement from RBI that Banks would have been waiting for, but it remains to be seen the real quantitative impact.
Perceptions: Cryptocurrency versus Blockchain
Technology of the blockchain, cryptocurrency, and transparency offer ledger technology, and should ideally be a breakaway for India, where bribery and corruption rampant through every aspect of life.
However, the failure of the mainstream media to understand and display the facts with an emphasis on the illegal activities that originate in the darknet has marked such potential.
Crypto Regulatory Clarity in India: The Lack of Mass Adoption
Blockchain technology was adopted in different economic sectors in India, including education and trade. Therefore, it is obvious that the only blockchain technology selling points are being applied, but there is still skepticism around cryptocurrency. Gaurav Dahake, Chief Executive Officer of cryptographic exchange Bitbns, said:
"The understanding of the whole sector is confusing. Blockchain is good, it seems cryptocurrency is bad, and traditional media have blown out things. The overall understanding is bad. Concerns are related to the use in illegal activity of money laundering. We have tried to deal with this as exchanges.
Considering all factors related to management and regulators, it is important to be aware that the technology blockchain is a disruption to the stipulated growth of financial markets. There is therefore no ideal idea for it to co-exist within the rules, according to Sogani: "The crypto industry-Bitcoin, in particular, has been developed above the regulators and its surrounding ecosystem.
The P2P exchanges flourished even when the RBI blockage was in force.
Exchanges and other major players have stepped up to self-regulate and/or contributes to the policy framework in the absence of the right regulatory framework, as proposed recently by Ripple. "We follow almost 60% of things normally mandated by brokers or trading exchanges," Dahake added further.
With the statement from RBI that banks are not prohibited from dealing with cryptocompanies and traders, a clear message to a demographic of 1.3 billion now appears: in this asset class there are no legal difficulties with the holding or transaction.
The huge demographics are bound to have a considerable impact on the global cryptographic industry, which will focus on investment and business driving in India. RBI, the government and crypto companies will have to cooperate to support the growth in 2020.
Volumes and growth of users
The crypto-industry, in fact, appears to grow. The increase in interest rates is measured as well as the number and volume that Binance acquired at Bitbns, CoinDCX, in late 2019, for instance for some of the leading India crypto-currency exchanges. Shetty said that the daily trading volumes of WazirX increased ten times in comparison with those of the prelockdown volumes.
