In the midst of India’s ongoing discussion about cryptocurrency regulation, a cloud of anxiety and uncertainty hangs over the country’s crypto ecosystem, as the government has hinted that the Cryptocurrency Bill will be introduced in the Winter Session.
According to BrokerChooser, a broker search and comparison website, India now has over 10 crore cryptocurrency investors who have together invested over $10 billion. A number of cryptocurrencies, particularly Bitcoin, have seen their prices skyrocket. At the time of writing, 1 Bitcoin is worth Rs 44.92 lakh. It is crucial to remember, however, that there is currently no law in India that regulates cryptocurrencies. However, there is nothing in the law that makes dealing in the same criminal.
If the proposed Bill declares cryptocurrencies to be illegal tender, investors will be unable to trade in any cryptocurrency class.
Prices will be affected by the ban.
“Existing traders and investors will be forced to book losses, resulting in massive financial claims and lawsuits.” All of this, Professor Padmanabha Ramanujam, Dean at IFIM Law School and a cryptocurrency expert, predicted, “will eventually lead to legal recourse with numerous court cases because of the huge investments already made, with a couple of court rulings already having been passed on the subject matter.”
However, cryptocurrencies are a global phenomenon that will be unaffected by any decision made by a single government. India’s cryptocurrency investments have surpassed $10 billion, reflecting the sentiment of both institutional and retail investors.
Any prohibition on bitcoin trading or ownership would be a major blow for India’s startup sector, which has recently exploded.
“A cursory search on LinkedIn for the term ‘cryptocurrency’ yields over 10,000 job listings in India.” Aside from these new openings, this industry employs tens of thousands of people now. Any government would be backward if it banned cryptocurrencies, according to Edul Patel, CEO and co-founder of Mudrex, a worldwide crypto investment platform.
When China’s top regulators outlawed cryptocurrency trading, coin prices plummeted, wiping off at least $400 billion from the industry. This is due to the fact that China has one of the largest cryptocurrency markets in the world.
However, India’s trading market share is significantly lower than China’s. As long as global firms continue to use crypto-related products and services, Ramanujam believes the crackdown will have no effect on cryptocurrency pricing.
Surprisingly, during the Reserve Bank of India’s 2017 ban, crypto exchanges did not see a major drop in trading activity (RBI). “Coin prices are unaffected by any particular country’s decision since crypto assets are decentralised,” Thakral explained.
Any restriction imposed by the Indian government would have an impact on cryptocurrency exchanges and platforms headquartered in India. The prices of the coins, on the other hand, would not change.
Investing will be stalled.
When a bank imposes a ban, all transactions between the bank and your cryptocurrency exchanges are halted. Users will not be able to convert their native currency into bitcoin or liquidate their existing investments.
Investors will be able to find purchasers in places where cryptocurrency is still legal, according to Ramanujam. “…although leverage is still conceivable in that situation, the transaction costs of liquidating crypto currencies would be significantly greater.”