In the modern world economy, virtual currencies have become a significant way to invest, especially with Bitcoins. In 2017 when Bitcoin was valuable, the Reserve Bank of India(RBI) failed to introduce its cryptocurrency akin to bitcoin called Lakshmi. This outcome led to dithering over whether to embrace cryptocurrencies or shun from its advances. RBI emphatically stated that cryptocurrencies presented systemic faults that would affect the nation’s economy. Even though, in reality, businesses were booming, a circular from RBI prevented banks from providing crypto services to businesses. RBI maintained their ground and even went ahead to conduct tax raids on several exchanges. This approach demotivated and even forced some crypto-based companies out of the country. After several petitions and court cases between RBI and these businesses, the Supreme Court’s on 4th March this year, squashed RBI’s proposed ban on cryptocurrencies in a move that saw many people in the populous country rejoice.
Consequently, this new legitimacy led to the industry’s unprecedented growth, as evidenced by the record numbers in user adoption and trading volumes. The trend was an indication that there was perhaps a bright future for crypto in India. However, reports by Bloomberg Quint in recent weeks reporting that the Indian government is on the verge of banning cryptocurrency entirely means that the celebratory mood may soon come to an end. A ban will adversely affect the ever-growing industry and its stakeholders, such as employees and companies that have taken active roles in the sector’s growth.One of India’s fast-rising industries is iGaming, and the convenience of transacting in crypto complements such growth. It is cheaper, safer, and faster to transact online with crypto as it offers better liquidity and anonymity of personal data, thus securing online gamers from internet fraudsters. Banning cryptocurrency trading denies the iGaming industry a chance to revolutionize e-payments, which would make the online sector marketable to a broader range of modern customers. There are alternative payment methods for iGaming, but the prospects offered by cryptocurrency are futuristic. To the ordinary online player, it helps to stay updated to the financial outlook of India’s iGaming industry to always know where the real opportunities lie.
To Ban or Regulate Cryptocurrencies in India?
In the past, cryptocurrencies were a regulatory grey area for the Indian government. Despite its volatility, crypto offered individuals an avenue to invest. It is no wonder that many governments and corporations around the world are gradually embracing Blockchain. As the trend continues, it only confirms that India risks ceding ground if it bans crypto exchanges.
The proposed ban will see anyone who deals, generates, holds, mines, transfers, issues, or sells cryptocurrencies spend no less than ten years in prison. Amid ban speculations, India’s industry leaders are skeptical about these reports since they believe that the government is instead working to introduce an efficient regulatory framework. Proper regulation will control the trading of cryptocurrencies rather than ban it altogether.
At present, the regulatory measures governing cryptocurrencies’ trade make India a risky landscape to invest in. Moreover, the uncertainty of current regulations makes it hard to promote innovation in the country. That said, instead of a ban, a regulatory framework that protects uninformed consumers should be implemented to attract crypto-businesses and investors worldwide.
The path to a Healthy regulatory Cryptocurrency Future in India
As earlier mentioned, regulatory uncertainties have been the leading cause of the slow adoption, expansion, and innovation of cryptocurrencies in India. Countless businesses have encountered pushbacks from the authorities in their attempts to inform the masses about the industry. Through their actions, these businesses even risk being shut down due to uncertain banking regulations. With this reality, how would a healthy crypto regulatory framework in India look like?
It should begin with a legislative process similar to the one that led to the Supreme Court’s decision earlier this year. All stakeholders, including the government, regulators, investors, and crypto industry leaders, should be engaged in the dialogue about the future of cryptocurrency and the industry. In other words, a communicative approach should be on the cards to encourage regulation and not a ban. Furthermore, outside forces like the global financial watchdog, FATF, support crypto regulation over its ban.
The precedent discussion demonstrates that the industry’s resilience is not just due to its vast market potential, but also its worth. That’s why the Internet and Mobile Association of India (IAMAI) has also been interested. The organization is allegedly working to layout anti-money laundering protocols and guidelines for AML/KYC and other regulatory-related features. In essence, IAMAI’s role in the path ahead for crypto in India is to create a code of conduct for cryptocurrencies.
Generally, there is a possibility that India will follow in the footsteps of developed countries like the USA, Japan, Australia, the UK, and many others that have accepted crypto. In the meantime, the lift on the ban has seen new people signup for the cryptosystem. Additionally, India’s Covid-19 lockdown has also contributed to the crypto industry’s rapid growth since people spend more time working remotely.