The Rise And Fall Of Bitcoin & Other Cryptocurrencies In India, And What Its Future Looks Like

Cryptocurrency is a controversial topic to be sure, with some all for the gains it offers, while others worry about its volatility. And, of course, there¡¯s also that group of people that don¡¯t know or don¡¯t care about it.

And unfortunately for crypto-enthusiasts here in India, it might have just gotten much harder to engage in the virtual currency craze sweeping the globe.

The RBI in a statement yesterday said it¡¯s now banning cryptocurrency trading in India among entities it regulates. The move comes months after the authority began issuing warnings against Bitcoin and other crypto tokens.

¡°In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling virtual currencies,¡± RBI said. An official circular detailing this announcement is expected to be released soon.

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Within hours of the news, Bitcoin and Ethereum prices fell drastically on Indian exchanges, though they seem to have rallied somewhat. As of the time of writing, the value of Bitcoin is about Rs 3,98,341 -- a spectacular fall from the heights of over Rs 10 lakh per coin it touched towards the end of last year.

Indian exchanges don¡¯t seem to be worried however, claiming ¡°business is normal¡±. And they¡¯re partly right. Crypto exchanges are currently not regulated by the RBI, so this doesn¡¯t affect trading. However, if you want to buy any crypto to begin trading, you now can¡¯t do that from an Indian bank account. After all those ARE monitored by RBI.

Regulated companies already offering cryptocurrency trades or services will have to cease operations within a certain time period yet to be announced by RBI. What will happen to investors¡¯ funds when that happens? Well, they¡¯ll likely just remain frozen indefinitely. After all, even if exchanges shut down, your virtual assets are on the blockchain, not tied up with their finances. So even if you¡¯re not be able to trade or cash out your crypto here in India, you could still technically do it outside our borders and it would all be legal.

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What do some of the cryptocurrency industry voices have to say?

¡°These restrictions can lead to the promotion of cryptocurrency transactions in cash, which will only make tracking the transactions much more difficult, whereas it can be quite seamless to do in case the transactions are done online through Banks,¡± says Som Shekhar Singh, the Technology Director of Sapient Consulting. In that case, it¡¯s only likely to push the government to crack down further, and brand all crypto transactions as involving ¡°black money¡±. And once that happens, not just cryptocurrency but all applications of blockchain technology will garner ill favour in India, especially among policy makers that don¡¯t understand it.

¡°I personally think that this phase of crypto currency products and usage will blow over and evolve into something entirely new and different, says Kallol Borah, founder and CEO of Lukup Media. ¡°Crypto currencies are very useful because used in the right way, they can bring more transparency to ownership of assets than holding or transacting in cash does.¡±

Also Read: Want To Invest In Bitcoin? Read These 7 Warnings From RBI Before You Risk Losing Your Money