This past week has been buzzing with the potential ban on cryptos in India which has taken the entire crypto ecosystem by shock.
Investors, exchanges and startups are now left debating whether the Indian government will indeed completely ban all cryptos, which has sent prices crashing, resulting in losses for many Indians.
Before we go into the potential ramifications for the crypto industry, here are two other stories that also caught our attention
- Paytm Stock Climbs! Paytm saw a stock price bump and reported 63.6% higher quarterly revenue this past week, but its net losses widened by 8.42%
- MobiKwik IPO On Hold: As investors pull out with concerns about the fintech startup, MobiKwik’s public listing has been pushed backindefinitely
Crypto In Murky Waters
If the year began with a massive boom for the crypto industry, it’s looking like it might end in a bust.
The Indian government has listed the so-called crypto bill — officially named “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021″ — for the upcoming winter session in the parliament.
While the contents of the bill are not yet privy to the public, reports indicate it seeks to ban all private cryptocurrencies while allowing a few exceptions in terms of the usage of the underlying technology or blockchain.
Crypto Investors Sweat: Binance-owned crypto exchange WazirX crashed after the news broke, as investors overloaded its servers looking to cash out before the prices went on a tumble. Bitcoin saw an immediate dip of $1,500, but other cryptos did not suffer a stiff fall. At the moment, though fear lingers and there could be other dips to come.
As per estimates, crypto investments in India have crossed the INR 6 Lakh Cr mark, but fear over a potential ban has left many investors uncertain, some of whom have invested many lakhs in crypto assets.
Will India Ban Crypto? There’s no answer to this question yet. Although the bill’s description sounds as ominous as before, there’s no clarity on whether the government will completely ban crypto. The draft and the final bill that is tabled could have significant differences.
Many like Ashish Singhal, founder and CEO of crypto unicorn CoinSwitch Kuber, are hopeful. Others urged investors to remain calm. “Our discussions (with the government) in the past few weeks indicate a broad agreement on ensuring that customers are protected, the stability of the (crypto) financial system is reinforced and India is able to take advantage of the crypto technology revolution,” Singhal said, echoing the voices of the Indian crypto industry.
Mixed Messages: However, finance secretary TV Somanathan said that the cryptocurrency will never be accepted as legal tender in India. And then there have been reports that the government will only target the use of cryptocurrency in hawala, foreign exchange violations and terror funding. It’s all very uncertain, at the moment.
In response to the potential blockade on crypto investing and trading, the Blockchain and Crypto Assets Council (BACC) said that any blanket ban will only serve to encourage non-state players and lead to higher unlawful usage of cryptocurrencies.