India is responsible for approximately ten percent of all Bitcoin transactions, but recently, the country’s central bank has banned all financial institutions from processing any orders made on cryptocurrency exchanges. Despite this ban, the trade volumes and prices have actually increased over the past month.
The government set up a committee in which the future of cryptocurrencies was discussed, and this was when it was decided that the complete ban would be put into place. This was not entirely unexpected, as the finance minister made it very clear at the beginning of the year, that it is not considered to be legal tender in India, and even compared it to a Ponzi scheme. On top of this, the exchanges have also been raided by the tax authority.
This decision sparked huge amounts of tension, especially when it was estimated that more than 5 million investors were transacting 2-3 billion INR daily across the 12 crypto markets. People were so against this ban that one petition gathered 22,000 signatures in just 5 days. Since this decision was made, the price of Bitcoin has risen from 350,001 INR to 618,000 Ruppees.
The CEO of BuyUcoin, Shivam Thakral, has said;
“There is a positive sentiment in the industry that the government will not ban trading in cryptocurrencies, and even if formal banking channels cannot be used, people can move to crypto-crypto trading platforms. New investors are coming to our exchange while existing ones are regaining interest after the drop because they’re getting good value and making money as the prices of cryptocurrencies move higher.”
Even though this ban has been implemented, people of India are cautiously optimistic about the future of cryptocurrencies. Unlike places such as China, where members of the public have little say, India is different, as it is a democracy.
Anirudh Rastogi, who is the managing partner at a law firm representing Indian cryptocurrency exchanges said;
“It has come with this overarching order that can be challenged on several counts. There is a right to trade and it cannot be restricted in absolute terms. Only reasonable restrictions can be imposed and applied but a complete prohibition as restrictive as this was unnecessary.”