The Reserve Bank of India (RBI) reversal of the outright currency ban on Crypto March was a gift to the flourishing Indian Crypto-industry. The emergence of new exchange platforms in the country has stimulated the steady and healthy growth of the industry.
While India is one of the countries most affected by the coronavirus pandemic, this significant growth is notable. Indeed, the epidemic has led to a declining economic disaster across the country. In these times of crisis, blockchain and digital currencies have proven to be the desperately needed remedy for investors and pioneers of fintech.
Crypto regulatory mistrust
However, lifting the blanket ban does not seem to be the ultimate solution to the regulatory uncertainty that most hoped for. There have been alleged incidents where Indian banks have refused financial services to companies related to cryptography. The good thing is that the industry has a more explicit regulatory structure than in 2017; the scale of the cynicism and the turmoil was exorbitant.
In particular, a rumor has emerged within the Indian Ministry of Finance for an inter-ministerial consultation on a law proposing that all cryptographic operations be abandoned. The bill included a heavy financial penalty for the culprits and an extended prison sentence. Recently, the rumor has been refuted.
According to a business consultancy firm, AKM Global, if the blanket ban proposal became law in its current way, it would "completely decimate the crypto industry in India". The rumor has sparked fears already disappearing in the cryptocurrency industry in India. Regardless of recent rumors, Nischal Shetty, CEO of WazirX, still maintains his confidence in the government.
An email sent to Cointelegraph cryptographic media cited:
“The day the news of the“ note ”broke, it caused panic in the community. But that's all. We have seen no difference in trading behavior on WazirX since then. There has also been speculation about banning crypto in the past. With over 5 million crypto users in India, I am confident that our Prime Minister will not let us down. "
Indian banks are hesitant to embrace the crypto industry
In addition to RBI, some private commercial banks in India have refused to process cryptocurrency transactions. However, a large percentage of speculation suggests the reason why the cryptocurrency industry lacks knowledge; as reported within various government agencies.
Siddharth Sogani, the founder of the research company Crebaco, thinks there could be other conflicts of interest at stake. According to him, "the banks will always be globally opposed to this industry because if crypto goes into action ; P2P transactions will eliminate the need for third-party bankers. "
In any event, in response to a request for information from the co-founder of the cryptocurrency exchange Unocoin, Harish BV, the RBI did not in fact indicate any limitation regarding banks offering companies linked to cryptography and individual traders to account. It was the main RBI statement that the banks probably expected, but the real quantifiable effects remain.
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This is expected as they see cryptocurrency as threat to fiat currency which they control at will.