India Is Not Banning Cryptocurrency, Here's What It Is Doing Instead
It has been a tumultuous week for cryptocurrencies across the globe.
While China has blocked crypto exchanges, U.S. banks are steadily
declining cryptocurrency purchases. Meanwhile, Indian finance minister
Arun Jaitley, during the national finance budget, stated that the
country does not recognize Bitcoin as legal tender and steps would be
taken to penalize crypto payments, sending cryptocurrency enthusiasts
and investors in a tizzy. Shortly after the minister’s statement, the
price of Bitcoin fell to a two-month low of less than $7,000.
Jaitley’s comments managed to invoke doubts in India’s crypto
community again about legitimacy of trading, except this time,
authorities have decided to steer the debate clear of controversy for
good.
Shortly after the budget announcement, secretary of economic affairs
SC Garg said that the government will set up a panel to examine trading
of crypto assets in unregulated exchanges. The panel is expected to
submit its findings in a report by the end of March 2018.
Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee
(BACC) of Internet and Mobile Association of India (IAMAI) is one among
the many people in India working towards spreading awareness on
cryptocurrency in India. Following the finance minister’s comments,
Khurana revealed that he was happy that cryptocurrency at least found a
mention in the country’s national budget. “I recognized that it was a
step in the right direction. Having the finance minister say that
cryptocurrency isn’t legal tender is perfectly logical –-- every nation
barring Japan has taken this stance. It doesn’t mean crypto trading is
illegal, but comes with its own risks like any other investment asset in
the market.”
What happened after was unprecedented. Widespread coverage on media
outlets seemed to indicate that the Finance Minister had stated that
cryptocurrency was illegal, causing a tumult in investor circles. Since
February 1 (when the national finance budget was announced), Khurana has
been fielding calls to assuage harrowed investors and curious buyers of
the government’s stance and the value of crypto assets.
Bitcoin Experts Seek To Educate Indians About Cryptocurrency
The knee-jerk reaction to the minister’s statement and the consequent
fall in Bitcoin prices could be attributed to a lack of awareness about
Bitcoin itself. “Right now, the general understanding of the term
Bitcoin in India is vague. There are a lot of people in India who are
intrigued by the technology but don’t understand it well enough,” said
Khurana.
Regardless, India’s cryptocurrency trading volumes have been on the
rise. While there are no official figures, Khurana says there are at
least five million active traders in India, transacting via regulated
banking channels.
With India’s leading cryptocurrency exchanges such as Zebpay,
Unocoin, Coinsecure, Coinome and Bitxoxo among others reporting a marked
increase in user interest every day, IAMAI has been focusing on
increasing user awareness outreach programs such as educational videos
and reading material, becoming one of the first industry bodies in the
world to do so, said Khurana.
In addition, IAMAI is also working on putting together an online
course using input from industry experts and Bitcoin exchanges as well
as developing a self-assessment test. “There are multiple dimensions to
Bitcoin such as the technology, security and privacy. It is important to
be aware of every aspect, to understand Bitcoin better and make
informed decisions while trading,” added Khurana.
Industry Joins Forces To Advocate Legitimate Cryptocurrency Usage
In a move that promotes industry collaboration, The Digital and
Blockchain Foundation of India (DABFI) and the IAMAI merged in November
2017 with the aim to popularize blockchain technologies in India and
build an advocacy platform for cryptocurrency in India. Several major
Bitcoin exchanges in India such as Unocoin, Zebpay and Coinsecure --
also founding members of DABFI -- are now part of IAMAI’s Fintech
Council.
Sandeep Goenka, cofounder of Zebpay and head of the newly formed
fintech council said, “The current government is open-minded and this is
a welcome change for those developing revolutionary technology. The
most ideal way to strengthen the system is by using approved banking
channels to onboard new customers and legitimize Bitcoin trading. The
largest Bitcoin exchanges in India are already implementing these
measures, and they should be standard practice.”
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