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India drafts bill to repeat ban on Crypto trade
Oct, 07 2020
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India prepares to bring a new law restricting
the exchange of security crypto, setting it out of tune alongside other
Asian nations which have decided to regulate the emerging market to minimize crypto
risk. The draft is estimated to be examined shortly through discussions by
the cabinet prior to forwarding the bill to parliament. The Central Government
of India will aid in nurturing the blockchain innovations which empower
cryptocurrencies like ICO bitcoin, but it shall not promote use, trade
or exchange of cryptocurrency.
In 2018 India’s Central bank, the Reserve Bank of India had prohibited
crypto exchanges after a series of frauds took place in the days following demonetization
of Indian Bank Notes affecting major chunk around 80% of the currency
circulation. In September, Crypto trading platforms countered with a claim in
the Supreme Court and earned respite in March this year.
The victory in the Supreme court incited roughly 450% spike
in trading in a mere couple of months since this March. This has raised alarms
as many Indians risk their savings in the midst of growing unemployment and an
economic lull further degenerated by the COVID-19 pandemic. STO Bitcoin
trading platform Paxful gained $20 million, an 883% jump from January to May
2020. Mumbai based crypto trader WazirX, saw an immense growth of 400% in
March 2020 reported TechSci.
Regulations set by India can have a tremendous impact on the
crypto scene. Leading Asian economies like China had initially banned crypto in
2017 but now look to gain a boost from the digital currencies and blockchain.
China is soon going to launch its own digital currency. Singapore and South
Korea have legalized digital currency trading and establishing crypto trading
companies.
Niti Aayog, India’s think tank, is investigating the
potential of blockchains to publicly store value-based blocks across databases.
For instance, maintaining property records, pharma supply records or database
of educational certificates. While the government is planning to use blockchain
innovations, it is reluctant to allow crypto trade. Another trading prohibition
can impact over 1.7 million Indian users who exchange digital assets along with
the growing number of firms establishing trade platforms.
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