India Bans Cryptocurrencies ? Future of Cryptocurrency in India is A Big Question Mark –
Social media is currently booming regarding the cryptocurrency ban news in India. You might’ve heard that RBI – Reserve Bank Of India has banned bitcoin or cryptocurrencies. It’s one of the most trending news now-a-days because people have invested Lakhs of rupees from their saving in purchasing several crypto assets. But do you know that India actually has not banned cryptocurrency totally. Several Facebook pages are busy in creating FUD (Fear, uncertainty and doubt) and in panic people are selling off their holdings on cryptocurrency no matter in how much profit or loss they are. So what exactly happened ? let me clear your doubts from the beginning.
How it Was Started –
Back at the time of union budget 2018, India’s Finance minister Arun Jaitley announced cryptocurrencies will not be a legal tender in india as Several cryptocurrencies like Bitcoin are decentralized. It means no one except the sender and the receiver can trace the transactions. That’s why many illegal activities take place using crypto.
“The government will take all measures to eliminate the use of crypto assets in financing illegitimate activities or as part of the payments system …”Arun Jaitley said.
Govt clarified that trading crypto assets is not illegal, anyone can hold or sell their assets as longer that’s not used in any kind of illegal activities including facilitating crimes like money laundering. Still that time, same type of rumors were spread that Govt. Has banned Bitcoin or cryptocurrency in India. Which was undoubtedly a FUD. Still from the time Indian Govt. has been facing difficulties on regulating de-centralized cryptocurrencies, and many inter meetings were arranged that leads to the recent major outbreak.
Recently on 5th April 2018, RBI deputy governor BP Kanungo released a notice that Bars entities regulated by RBI from Trade of Cryptocurrency.
RBI on Cryptocurrency –
The official RBI statement states,“Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. 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 VCs. Regulated entities which already provide such services shall exit the relationship within a specified time.”
Banks will not allow you to deal with or facilitate dealings with or in cryptocurrency. Essentially It means that you will not be able to deposit money from your bank to your crypto wallets or vice-versa. But Govt. didn’t announce anything like Cryptocurrency is going to be banned completely. All banks are given a 3 months of time period to regulate. Indian Govt. is trying to convince people that dealing with cryptocurrency poses several risks for customers and it also affects the market integrity for its fluctuating values. Still in anyway, Govt has not banned bitcoin or any cryptocurrencies, this notice is only for new bank regulations, people can still trade those at their own risk.
So What Does It Mean ?
crypto assets like Bitcoin, Ethereum, Tron, Ripple, Monero, Electroneum etc. that stored in your digital wallets are completely safe. You can also transfer cryptocurrencies in your wallet and trading cryptocurrencies won’t land you in jail. RBI warned banks about cryptocurrencies in January, currently several banks have terminated their customer’s account for buying and selling of cryptocurrencies. So the actual thing lies on the transactions part, in simple way we can say, people will not be able to perform transactions for doing any kind of activity involved with cryptocurrencies. Few banks are posing bars for users to trade digital assets, like Citi Bank sent newsletter to its customers stating Citi Bank credit or debit cards can no longer be used to buy or sell any of the cryptocurrencies. Some of the indian exchanges are working with couple of bank that still support crypto related transactions, while other indian exchanges uses third-party banking gateways, that gateways are functioning well as of now but that also rely on banks to settle payments hence they come under the same purview.
Currently there’s a huge market crash, several cryptocurrency has lost more than half of their previous value. After the RBI announcement bitcoin was trading at Rs. 3,75,580, Not only bitcoin, major cryptocurrencies like Ether, Ripple, Litecoin, Tron, Bitcoin Crash, are experiencing a sharp decline.
What to do right now –
- Indian doesn’t control cryptocurrency, so RBI’s decision won’t effect it. In case you’re in loss and If you’re a long time investor, then you may hold your crypto assets. Bitcoin and the value of the currencies are at the lowest value of the time, so it might be a good time to invest. Also if you’re in Good profit, you may sell your holdings as in future you may have to face difficulty in transactions.
- Cryptocurrency isn’t banned in India but Banks won’t allow you to deposit money in digital wallets of the exchanges for buying or selling cryptocurrency. Govt has given 90 days of time to the banks for terminating business relationship with regulated crypto entities. Not only you can transfer money from bank to wallets, also you will not be able to withdraw you money from exchanges after selling off your assets after the RBI imposed timeline. So keep this in your mind, before doing anything.
- All exchanges like ZebPay, UnoCoin, BitBns will exist but they will try to find some other way to facilitate transactions. Like there would be some third-parties whom you can send your money using various bank transfer mode, and they’ll credit crypto balance onto your wallet.
- In case you’ve much holding over crypto assets, then you should move them into a offline wallet. Even your exchange faces any kind difficulty in trading, you won’t have to worry a bit.
Banning the transactions for cryptocurrency would surely make India lag behind the technology. Still it’s uncertain, if RBI will put a hold over this notice or not. Moreover Like china, Indian government is exploring the blockchain technology, Reserve Bank Of India already settled up an inter-departmental group to prepare a report for launching a centralized cryptocurrency, therefore, offering the same limitations as the current fiat. Posing bars to introduce a central bank digital currency, doesn’t seem to be a good move. But anyway Stop spreading FUD, and trade bitcoins or any digital cryptocurrency at your own risk. God Damn ! It is not banned.