Are cryptocurrencies illegal in India?
Crpto currency is banned?
This is a pretty outrageous statement about the crypto-scenario of India.
On April 6, 2018, the RBI ruled over cryptocurrenies to be unsafe and high risk investments prohibiting people from investing in crypto. The fact here is that RBI itself lacks jurisdiction in these matters, as it is the right of the citizen to do business.
The concerns of Pune based Shubham Yadav, founder of the crytpocurrency exchange CoinDelta, in India increased when apart from losing trust among the investors following the RBI ruling, their bank accounts were also being freezed which would mean their day to day operations and payments would fall back bankrupting the company. To mend the falling dream Shubham along with other crypto based companies filed a Public Interest Litigation in the Supreme Court, in May.
Court on July 20, 2018 which was a few days ago, in a three judge panel discussion set September 11, 2018 as the next and probably final date of hearing. CoinDelta among others which was getting 6000-7000 registration per day has fallen to an all-time low of 50-60 registrations per day. Exchanges like Zebpay and Koinex have tried to come up with crypto pair solutions where though you cannot liquidate your crypto money to INR or deposit more of INR but you can still continue trading between the available virtual currencies. Some Indian exchanges have also decided to shift to places where like Malta and Estonia where regulations are not shrewd while, RBI prepares to tighten it’s stance against crypto trading.
But the question still remains,
are they illegal or not ?
Breaking it down
To be more clear about the question bitcoins or any other form of crypto currency cannot be banned as tried by Chinese government previously. Inspite of all such bans the price of bitcoins keeps continuously soaring, currently at $9000 USD from $1000 USD. This seems strange compared to most business logic but that’s what give crypto its uniqueness. So the RBI banning the Indian crypto exchanges and wallets will only make the Indian investor buy crypto from other foreign exchanges in an over the counter fashion. They can trade their earnings for USD and then convert the USD to INR which will be again tax free thus making the ban backfire.
Streisand Effect in play – which means the more governments try to ban it, the more popular it gets, the more news, the more coverage.
The more countries and governments try to capture this soaring trends the more it will rise thus realising its idea for creation. Liberation from the centralised banking systems and more security. Though the crypto exchanges are already under scrutiny for lack of security, bitcoin’s or particularly the blockchain system is secure and tamper proof. To be on the safe side keeping your ledger and money in a cold wallet would be better than keeping it in hot wallets.
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