Cryptocurrencies hit hard on Indian exchanges, after RBI’s near-ban policy
On Friday, there was a fall in Bitcoin and other cryptocurrencies on local exchanges. This happened because the Reserve Bank of India moved to obstruct banks and other entities under its control from having any connections to virtual currency traders.
Earlier, the people were warned by the government and the central bank on cryptocurrencies, with New Delhi promising to put an end to the usage of digital currencies, which in its opinion was illegal in the country’s payment system.
After allotting the report of its bimonthly monetary policy on Thursday, the RBI said that the units under its control shall not perform transactions with individuals or businesses dealing in virtual currency.
In India Bitcoin is considered as an unstable cryptocurrency, dropped to a low of 350,001 rupees or roughly $5,392 as per crypto-currency exchange Coinome, in comparison with its international market price of $6,617.
Vishal Gupta, co-founder of Block Chain and Cryptocurrency Committee, an industry body stated that prior to the announcement, Bitcoin was dealing at a 5% premium to its overseas price, and at present it is dealing at a substantial discount. Technology law expert Namita Viswanath, a chief assistant at IndusLaw, observed this as a hostile move.
The RBI in the place of taking a whole methodology and to observe in what way to curtail the possible misuse, it appears slightly broad-stroke method of entirely eliminating this. The RBI on Friday specified that within three months, any regulated units that before now gave services to assist trading with virtual currencies will have to cut all its bonds.
Earlier, cryptocurrency investments were compared by the Indian government to Ponzi schemes i.e. fraudulent investments which give remarkably heavy returns to investors. A board has been arranged to find out topics concerning to cryptocurrencies and plans to appoint a controller for supervising those exchanges that are unregulated.
However, worries have been raised regarding the withdrawal options for those investors who at present have cryptocurrencies, by a statement made on Thursday.
An evaluation was made by Gupta that, in India minimum 4 to 5 million people hold cryptocurrency and from them, 60% moved into the market at the time when its prices were the highest, between October and December. He stated that from them majority have by now sitting on capital losses and the asset has been deceased and you cannot further deal with it. And your bank accounts will be closed, in case you trade with it.
On Thursday, the RBI said that concerns have been raised by virtual currencies, regarding the safety of consumer, market integrity and money laundering. Shivam Thakral, CEO of BuyUcoin, a cryptocurrency exchange, said that they may have to turn their business model from crypto-fiat to crypto-crypto, totally removing the fiat part, if the government remains firm in their decision.
