The Indian crypto community has been fighting against the crypto banking ban for a year now. The circular that laid prohibition on conversion of INR to cryptocurrencies and vice versa was passed by the Reserve Bank of India in April 2018. Ever since the ban, things in the Indian crypto market haven’t been the same.
The doors of seamless trading have been shut for crypto traders, fiat conversions are an issue and in this dark span, some Indian exchanges are working through these limitations to continue to build the community.
Exchanges such as Koinex.in, Bitbns.com, Wazirx.com and more brought in P2P [Peer-to-peer] exchange withdrawal/deposit mechanisms to convert cryptocurrencies to INR, although, this is pretty time-consuming it definitely does the work to buy/sell digital assets in India.
As risky as P2P trading can get, it actually has developed a sense of trust in the Indian crypto-community because of the constant efforts put in by the Indian P2P exchanges.
While the Indian crypto market is building a trust machine, there are high chances of things going south. If the Supreme Court of India runs in the favor of RBI and implies a ban on buying, selling and holding cryptocurrencies, India will lose the opportunity to get into the ride of financial sovereignty. And how much is missing this opportunity going to cost India? A lot!
As a fast-growing economy, cryptocurrency and blockchain could be the solution to a lot of barriers India currently faces as a nation. The unstructured voting process, the long banking queues, the undisciplined regulatory network – much can be changed through crypto and its technology.
When RBI pointed out flaws in the trading of cryptocurrencies one of their first concerns was the capital flow and how unmonitored it could be to let people invest their money in assets that are not centralized. Forward-thinking economists are urging governments to provide financial sovereignty to their citizens. We as individuals should have the basic right of managing our own wealth without the interference of a centralized authority.
Now to be politically correct, holders of crypto assets under the unfortunate circumstances of a cryptocurrency ban have a few ways to deal with the situation, things will or can happen are:-
- Selling of cryptocurrencies on their respective exchanges because now people won’t have the basic rights of wealth management.
- Investors will send their cryptocurrencies to international exchanges with no KYC requirements. [Ahem, take the hint]
- People will convert their cryptos to a privacy coin
- People will send their cryptocurrencies to their relatives/friends who stay abroad with an international residency.
- Cryptos will be used as collaterals to get some USD off companies that offer loans on cryptos.
- People will start buying things online with cryptocurrencies, I don’t mean to say drugs off the dark web, one can even buy legitimate stuff out from the internet too. Basically, it will become a currency restricted to the internet.
- A black market for Bitcoins and other cryptocurrencies will rise, trading will take place in grey and dark markets within India. The number of unregulated OTC trading will rise.
- Smart blockchain developers who would have contributed to India’s economy will now leave to other countries with better crypto-friendly regulations.
- The 300+ blockchain startups in India will shut down their operations, missing out employment opportunities for over 1M engineering graduates and 6M software devs.
- External blockchain companies will stop looking at India for investment opportunities.
- Last but not least, people will store their cryptos in a cold wallet OR in a pen drive and courier it abroad, or might even keep it in a bank or a safe locker.
If India does ban cryptocurrencies, it will become a bystander in the most exciting technology race.
In the current situation, holding any kind of cryptocurrency is not illegal in India. Bitcoin and other cryptocurrencies as of date are tradable assets and can be hodled, sold or bought like any other legal asset as long as there is no regulation passed stating the illegality of cryptocurrencies and their trading.
To support crypto a couple of Indian influencers have started movements online. You can follow Nischal Shetty’s ‘India wants crypto‘. Or Crypto Kanoon’s ‘Useless Crypto Bill‘ or just HMU on my social handle and we can all start a movement together!