Crypto ban will have affect 5 mn Indian and 20K Blockchain developers: Why you should care?
In the year 2017, RBI was reportedly proposing a cryptocurrency of their own, similar to Bitcoin. The token was to be named Lakshmi but the idea had a premature demise. After flagellations over time, the regulators and policymakers decided to opt for an antithetical stance against cryptocurrencies, outlawing their use and threatening incarceration of the users. The Bill against cryptocurrency in 2019 also proposed a 10-year long prison sentence for the ones involved in generating, mining, selling, transferring, holding, issuing, and dealing cryptocurrencies. While the former regulatory structure offered a gray area for investors, investors naturally flocked in to lay investments. But given the circumstances, the ban will have an immediate effect over the users and investors.
Where will the holding go?
While India has issued a ban on digital currencies, other nations like E.U, Japan and the U.S. could effectively set up regulations and laws associated with cryptocurrencies. Regulations have also been a recommended step advised by the Financial Action Task Force and the G20. The bill is yet to enumerate the ways of offloading the holdings by Indian. There has been no mention of any cross-border transfers and neither is there any precise wording that contains cryptocurrency definition, leaving it open-ended. Some companies have already registered themselves abroad out of the circumstantial hindrance in India.
Where’s the exit window?
There isn’t any safe harbor for users who dealt in crypto assets before the law, leaving their position to exit still very ambiguous. The bill, however, doesn’t provide any solid curbs on offshore market sell-off which can be a plausibility for these users to exit position. The bill does mention that upon activation, users will be provisioned with a 90-day period to dispose of their crypto assets.
What will happen to the 5 million Indians who own crypto?
This arbitrary decision can potentially harness the capacity to destabilize the existing business structure. The ban will render the cumulative wealth useless, leaving a resounding void in terms of innovation. Even though people are speculating the reality of the bill getting passed, anticipation of the same further denigrates the investors who have invested in this legitimate investment venture.
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Will there be any Industry Impact?
The ban can potentially push India back where they could’ve made proper use of the distributed ledger technology. India houses about 19,627 Blockchain developers, making them the 2nd largest hub globally. A large section of this pool, works on blockchain-based financial services, which eventually will become useless post-ban.
While RBI has issued interest in pushing a rupee backed digital currency, outlawing digital currency entirely won’t just denigrate the country’s reputation as a technological hub but will also hurt the innovations that were to come. In spite of being in the crosshairs of conflict, the Indian blockchain sectors have received a whopping $5.3 Billion as capital funding. So, all of this will essentially be lost once the ban is in effect.