India, Asia’s third-largest economy, is reportedly on its way to stop all crypto trading once again in the country, after a long tug-of-war of crypto legislation.
A new bill will be discussed shortly by the Union Cabinet before it makes its way to the Parliament. The bill comes at the same time when several national governments like Korea, Singapore, and Switzerland, among others, plan to regulate cryptocurrency trading.
Indian Government Flip-Flops on Crypto
After a long legal battle, the country’s apex court ruled in favor of the crypto exchanges and lifted the ban in March 2020.
The win in court stimulated an almost 450% surge in trading in just two months. The search interest for the term cryptocurrency in India spiked sharply in the same month and has been on a steady uptrend ever since.
India’s New Crypto Trading Ban
The Indian central government is averse to the idea of cryptocurrencies, but it remains keen on blockchain development. The renewed trading ban was planned due to a lack of regulatory measures needed to avoid strings of fraudulent actions.
However, the ban may affect more than 1.7 million Indian traders and a huge number of companies setting up platforms for the trade. Khaitan & Co Partner and New Delhi-based lawyer Sanjay Khan advises that instead of a ban, a regulatory framework can be made.
To ensure adequate oversight of the government and the RBI over cryptocurrency businesses…India can actually benefit from such a regulation to attract cryptocurrency investors and businesses
At the moment, India is yet to unveil its conceptual research with digital currency. Other economic monsters like China have already raced to this opportunity. Moving from its research stage, China has already designed the concept for Digital Yuan and started the experimental phase.
India Expands Crypto Infrastructure
Over the past six months of 2020, Indian investors have been largely moving towards the crypto market. Moreover, the Coronavirus economic crisis and unemployment have fueled investors’ inflow in crypto.
In fact, Hashcash Consultants planned to invest $10 million into the Indian crypto industry. The said company has a presence in 26 countries and more than 100 enterprises use its products.
WazirX, a Mumbai-based crypto exchange, also grew rapidly as it recorded a 400% increase in trading volume in March. In addition, Binance has acquired the exchange at this time, signaling a strategic move to drive crypto adoption further in India.
According to Coingecko, the exchange supports 73 cryptocurrencies and 155 trading pairs, with a 24-hour trading volume of $8.5 million, at the time of writing.
Similarly, Paxful, one of the leading peer-to-peer trading platforms globally, was greatly influenced by Indian traders as its trading volume multiplied from around $576,000 in May 2019 to $8.97 million in July 2020. What is more, CoinSwitch, which started operations in June, had enrolled more than 200,000 Indian users resulting in $200 million worth of traded assets.