Do you remember the latest crackdown the Reserve Bank of India (RBI), the country’s main banking institution had put on cryptocurrencies? Well, if you do not, that is just as well. In the following write-up, we will explore the repercussions of it. The latest round of regulations has left the crypto market in India in a state of disarray. Investors have been fleeing and the measures have de facto curbed the whole market, not leaving a single chance to operators to adapt to the new measures. India is quite committed to uprooting the practices.
Rahul Raj, Co-Founder and CEO of Koinex, an Indian crypto exchange, has expressed his gloom with the latest developments that have been effectively putting companies out of business without a remorse:
‘This unprecedented move by the RBI has stirred the market and impacted the industry at various levels. The exchanges have witnessed a steep decline in daily trade volumes and price fall for all tokens. In addition, traders who were looking at long-term investment through crypto assets will suffer heavy losses, especially those who have made hefty investments, out of their livelihood savings.’
Another respected leader in the crypto currency realm in India, Founder and CEO Belfrics Global Praveenkumar Vijayakumar has also confirmed that with the latest decision, India has de facto snuffed out any potential for future growth and expansion in the country, at least where cryptocurrencies are concerned.
India has long suffered from corruption, a plight that the current government of Prime Minister Narendra Modi has not been able to tackle. However, the RBI has long been at the forefront of issuing financial regulations that were always designed to help the country overcome its capital flow problems and create a healthier business environment.
But to rule out cryptocurrencies completely could be a is a mistake, some estimate. For starters, the country has a rampant problem with corruption and this is as clear as day. It would be best if the government and its central bank adopt а way for money to move around without becoming the plunder of corrupt functionaries. It would also help to lead India towards digitalisation at a time when the rowdy neighbour China is preparing itself to mount a full-scale attack on the digital sector by issuing its very own sovereign FIAT digital currency.
To be able to remain as a regional leader, other than by merit of its population, India should also engage with new technologies and mostly think about how it wants to distribute its money moving forward. Anything less would have to be questioned and the country’s policymakers will have to go through a rather difficult debate.
Of course, Mr Modi cannot really intervene in favour of digital currencies. He has long exhausted his political capital to be seen as a peddler of unpopular policies. His position would definitely not help do anything healthy for the business involving cryptocurrencies.
Is there a silver lining after all, then?
Yes, India can rely on its entrepreneurs. While they will not be able to openly work on ICOs and related crypto moves, it would still be quite possible for individuals to solicit capital from investors form India and patch them through with companies in Hong Kong and Singapore.
China has recently hammered its own ICO industry and is now seeking to sever ties with foreign exchanges. This is a risky move but one that will nevertheless allow the country to get a foothold in the future of cryptocurrencies.
If Indian investors scurry off to a country which will take their capital and promise to develop it, or at least try, then later on, these same entrepreneurs may come back to India, after the ban is possibly lifted, and tap the enormous potential that the country has by merit of its population.
It will be quite exciting to see how India will take care of its future in the financial system. Digital money are an indispensable part of the future of any company and India will do well to act accordingly and try to create a form of digital currency. The benefits are countless. From reining in corruption to making sure that every citizen can make a living. The digital future of India should be something people ought to care more for, especially its own government.