It seems like all the experts can agree on one thing: that a full ban of cryptocurrencies would be devastating to India, but are the country’s regulators listening?
How India Could Fall From a Crypto Ban
This is a topic that the nation has gone back and forth on for well over a year. Regulators are now initiating a proposal that would see all cryptocurrency-based activity receive a full ban within the country’s borders, while utilizers of cryptocurrencies would receive up to ten years in prison.
This is scary to say the least, not only because people face potential jail time, but because India is likely to cut itself out of some major competition in the future should it decide to initiate such a ban. India is a nation strife with economic struggle, partly because of its ever-growing population. It is now being reported that that population will overtake China’s within the next few years, which means there stands to be even more people who miss out on potential financial stability.
It’s true that cryptocurrencies are still hugely volatile. Bitcoin, for example, has fallen from $13,600 to about $9,900 over the last month, but when so many people stand to miss out on traditional financial opportunities due to lagging credit or other necessities, sometimes crypto is the best option one will find. After all, if crypto requires no credit check, payments can be made quickly and people can receive money in their accounts in mere minutes, there are far more benefits to be had.
Where India is succeeding, however, is in its recognition of blockchain. Many regulators look down on cryptocurrencies themselves but acknowledge that blockchain technology certainly has potential.
A new legislative report discussing the potential crypto ban issues the following statement:
The DLT-based systems can be used by banks and other financial firms for processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market.
We Love Blockchain… Crypto, Not So Much
Economic affairs secretary Subhash Chandra Garg echoes this sentiment and explained in a tweet that while India is right to arguably ban crypto, it cannot ignore the power of blockchain. He states:
The committee is very receptive and supportive of distributed ledger technologies and recommends its widespread use in delivering financial services. It also opens the door for a possible official digital rupee. Private crypto currencies are of no real value. Rightly banned.
His tweet raises concern, however, with the possibility of a digital rupee. As the national currency of the region, the rupee, should it be digitized, will likely be issued by banks and traditional financial enterprises, meaning that the currency is sure to remain centralized. This goes against the ideals of crypto and may not prevent future financial breakdowns.