For the past few days we have been hearing a lot about India and and its stance against cryptocurrencies. It wasn't enough that we just beat one ban against crypto proposed by our country's central bank (Reserve Bank of India) that now we are again having talks of banning crypto.
On one hand we are being so Anti-Crypto and on the other hand we are widely investing into the technology that is the reason behind facilitating crypto. All this banning news comes right when big Indian conglomerates are getting interested in Blockchain technology and investing into this space. I have covered about the same here and here. According to this tweet by Mr. Mahindra, Mahindra has also invested in a blockchain start-up.
Recently Supreme court of India overruled RBI's April circular calling for crypto ban in the country. This move resulted in a widely applauded reaction towards the supreme court by majority on social platforms. But it's not even 3 months and here we are now again having talks about crypto bans.
This overturning of ban even resulted in the WRX coin pumping as much as 50%. Definitely saw some good profits there but i hold WRX more for a long term rather and for short-term trading. The fact that, on WazirX paying with WRX as trading fee you get 50% discount is also why i keep WRX ready.
Now as per this report by The Economic Times, Government intends to introduce a law for banning crypto, which will be voted upon. Imagine voting for something you do not understand. You will never vote for something that you do not understand and something as complex as crypto is definitely at a disadvantage here. People see crypto as a scam scheme in India and those who do deal with crypto do it purely for trading purposes. If you try to introduce crypto to someone they think you are trying to be a wise-ass by throwing these technical terms or just give up when they hear private keys, non custodial wallets, sats, eth,gas etc. Well Cryptocurrencies can be very overwhelming no doubt.
The draft law prepared by the committee said any direct or indirect use of cryptocurrency will be punishable with a fine or imprisonment, which shall not be less than one year, but may extend up to 10 years.
As per the draft law, a repeat offence will be punishable by imprisonment of up to five years, which could extend to 10 years with a fine. The fine could be three times the loss or harm caused by the person, three times the gain made by a person, or up to ?25 crore
This is what the draft that has been proposed by the ministry of finance says. Read for yourself. You may think why so harsh penalties. Because this will scare the people and they will avoid crypto. This is what the government is aiming for, to scare enough people that crypto does not achieve mass adoption. Also, why would the Indian government want crypto adoption. Bitcoin means decentralization and anonymity and that is exactly the opposite of what Indian government is looking for right now. The current government believe in mass surveillance and keeping in check where you spend your money , how much you spend .
This law will mean even hodling crypto will be an offense in a country which right now (in the times of this pandemic) is not even able to manage its own banking and financial infrastructure. A country where you do not have the right to ask what has been done with the money which we (the public) donated to the government to help us in time of this pandemic. Government wants to give us a relief of 20 Lakh Crores but when you ask clarification, it turns out it's not relief, it's a loan. Very little of this money is going to turn up in the public's hands who is suffering the most. To preserve the supply you need to maintain the demand as well and if there is no money in the hands of public where will the demand come from.
India’s decision to ban cryptocurrencies surface even as it faces one of its worst credit and banking crisis.
As Asia’s third-largest economy undergoes its slowest growth in more than ten years, rating agency Moody has downgraded its status to Baa3. Other agencies, such as Fitch and S&P, too, have kept India one position above junk.
Government knows with the economy failing investors have started looking at alternatives and Bitcoin is one such alternative and this scares them. Bitcoin adoption in India as its peak. Trading volume is off the charts. I have written an article about the same even before.
India's huge potential has even gotten BINANCE interested who recently accquired one of the most widely used Indian exchange WazirX. (I plan to do a review of this exchange so stay tuned for that as well.)
The only exception, they say, would be a digital currency issued by the state itself.
Government says we can issue our own crypto which we can track but not one like Bitcoin.
In an interview with Coindesk , Nischal Shetty had this to say.
This is all leaked information. There is movement for sure, but no one has been able to get clarity on whether it specifically talks about a ban, or whether it talks about just moving forward with regulation. There are a lot of assumptions. I’ve personally met people in government, right, ministers in Parliament, and what I’ve seen is they’ve been very positive about regulating, some of them have been very vocal that a ban is not the solution because they understand technology … they understand that banning a technology is not a solution.
Going by this it seems that there really is no clarity at the present moment. But one thing is for sure that, for long Government has tried to hinder this adoption of crypto in India. Shetty is absolutely correct when he says banning a new technology is not a solution.
Till then lets just wait for another report or authority that tries to ban Bitcoin. To be honest ask yourself Can one even ban Bitcoin? Buy it from a Non KYC platform or receive from someone and there is no evidence that you hold bitcoin.
