The government of India is currently chasing a strategy in shielding itself from the global cryptocurrency and blockchain space. Its current strategy proposes that India’s cryptocurrency economy could grow to an industry at any time, granted there be a regulated framework established. Law firm Shardul Amarchand Mangaldas & co-partner Anand Bhushan states that besides the concerns of the government via money laundering, there’s also risk in allowing digital currencies as a medium of exchange due to a huge amount of volatility and speculation. But to this end, India might finally be investigating ways to open up the market for the country of India.
In July, the Supreme Court of India declined to reverse the ban on trading cryptocurrency enforced by India’s Central Bank, and instead requested banks to keep the ban on providing services that were cryptocurrency-related. But could this be hurting India’s standing in the global market? This week the European Commission, the executive branch of the European Union (EU), acknowledged that the cryptocurrency sector as a legitimate industry. As we’ve talked about before here at Cryptotraderspro here, this industry has seen a 50 percent boost in crypto currency and also blockchain-related jobs in Asia. India’s choice regarding the prohibition of block-chain among the 3 core technologies at the fourth industrial revolution alongside big data and AI, a comprehensive ban on crypto currency trading and cryptocurrency as a sector could be seen as voluntary isolation from said industry. That means monies lost.
As a response, it’s quite possible that SEBI, in its annual report, disclosed it had sent government officials to study regulations in cryptocurrency markets in Japan, UK, and Switzerland. To reinforce the potential optimism of the SEBI, Danny Kim, head of growth at SFOX, states that the entry of large-scale investment businesses to the crypto currency market has caused an an equilibrium in the market, as noticed in the purchase-cost-movement of Bitcoin all through August of this year, as well as bitcoin having its most stable month since June of 2017. “Before Institutional firms were actively trading crypto or heavily involved (earlier 2018) Bitcoin price differences between exchanges varied as high as 4.5 percent,” says Danny Kim of SFOX’s Head of Growth.”
“Nobody is able to price the risk currently. The minute you have clarity on exchanges and whether digital currencies can be used as a medium of exchange or payment, or if it is a commodity, there will be less speculation dn much more stability in pricing,“ Bhushan said. Europe has continued to lag in the cryptocurrency industry in both trading volume and growth because of their rejection of this marketplace in 2012. Valdis Dombrovskis, the Vice President of the European Commission, said, ‘’We also had a good exchange of views on crypto-assets. We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow.”
The rise in popularity of cryptocurrency markets as well as regulations of exchanges by countries like the US, South Korea, France, UK, and Japan could encourage India to reverse its ban. Critics expect the exposure of government officials into foreign markets which have demonstrated a higher degree of regulation and success in the blockchain and cryptocurrency industry may be a significant factor that could divert SEBI’s plan.
However, as demonstrated by Europe and the market structure differences between European nations and leading markets like Japan, this will take time, capital, and resources to build this market.
Will India follow through?
