Indian Government Stifling Bitcoin and Blockchain InnovationStaff Writer
Last week marked a deadline for banks in India to stop dealing with cryptocurrency businesses. The Reserve Bank of India had set the deadline for July 5, with India’s Supreme Court failing to grant interim relief to businesses and individuals affected by the ban. The ban means that Indians will now face significant difficulties in buying cryptocurrencies with fiat currency, and cryptocurrency businesses such as exchanges have had their bank accounts closed. It’s part of the Indian government’s attempt to control the monetary system that began with the demonetization of the majority of the country’s circulating currency, but this latest move may irreparably set back India’s ability to compete in the cryptocurrency sphere.
It appears that the ban is basically fully complete, with banks not shedding any tears about having to sever relationships with cryptocurrency exchanges. Exchanges, therefore, have had to eliminate their customers’ ability to trade cryptocurrencies for fiat currency, so that Indian cryptocurrency investors will now only be able to trade their existing cryptocurrencies for other cryptocurrencies. They’ll have to rely on peer-to-peer networks from now on if they want to acquire cryptocurrencies for fiat currency, and they’ll only be able to use existing exchanges for crypto-to-crypto trading, although even that is in doubt. With cryptocurrency exchanges being cut off from the banking sector too, it’s likely that many exchanges in India will begin to wind down their business.
That’s a major setback for the Indian cryptocurrency world, ceding ground to the United States, Japan, and South Korea, which have all embraced cryptocurrencies to a large extent. Even China is set to embrace cryptocurrencies, although the government would prefer to issue its own cryptocurrency rather than allow private cryptocurrencies to circulate within the country. Will India’s move be a fatal blow to cryptocurrency and blockchain adoption within the country? Only time will tell, but the outlook certainly doesn’t look good.
That’s all the more reason for Bitcoin investors in the United States to thank their lucky stars that they have the good fortune to live in a country that welcomes entrepreneurship and innovation and continues to embrace cryptocurrencies. Whether it’s buying Bitcoin and Ethereum on an exchange, investing in a Bitcoin IRA, or trading Bitcoin futures on a regulated exchange, US investors have access to numerous investment options. And all indications from regulators point to that remaining the case for the foreseeable future.