Crypto enthusiasts and supporters in India are worried about the decision that will be made by the committee that was set up to come with a decision as to whether cryptocurrency and Bitcoin should be made legal in India or not.
The second committee headed by Subhash Chandra Garg who is the secretary of the Department of Economics affairs was set up to deal with the “conflicting opinions on the RBI ban.” Garg is in charge of the panel that was set up by the finance ministry back in 2017. It was set up to propose the norms on virtual currencies. At the moment the Garg committee is only being treated as draft regulations because it is still an early stage. Rashmi Deshpande who is an associate at a law firm that represents cryptocurrency exchanges (Khaitan & Co) explained that, “First the draft regulations will come out, then it will be introduced in the public domain for feedback. After that, it will be introduced in parliament, from where it has to get the necessary approvals to become law. Therefore, the whole process (of banning cryptocurrencies), even if it happens, will take time.”
Many different sectors of India will be affected if the ban does take place. Cryptobourses in India are already facing a lot of difficulties since the environment is already so hostile. With the Reserve Bank of India (RBI) barring Indian banks from having any relationships with account holders that deal with any type of cryptocurrencies, this has led to a huge crash in trading volumes.
HOW HAS CRYPTOCURRENCY HELPED
Cryptocurrencies especially Bitcoin has helped in the creation of a number sub-sectors that have helped in the enhancement of many companies and people. A Chinese based company by the name of Bitmain showed that its profits were more than $2.5 billion in 2017.
Cryptocurrencies also help small companies in a number of ways. BitPesa is a blockchain-based payment platform founded in Nairobi in 2013. This has helped a huge number of business payments to become successful in the “sub-Saharan Africa” to perform business transactions across borders easily. It also helps in the trading of materials from other places and bypassing big banks. These sorts of companies help to boost cryptocurrency to an international level which has slowly been growing. Even small nations would benefit hugely and give them a better international standing.
Blockchain technology and cryptocurrencies has given a huge number of people like writers, journalists, graphic designers, programmers and marketers successful careers.
When Bitcoin came in 2009 the financial sector was disrupted especially the payment system. But it did create a new decentralized “Silicon Valley” which was not controlled by venture capitalists.ICOs (Initial coin offerings) which are like IPOs (Initial Public Offerings) allowed blockchain projects to raise more than $6 billion dollars in 2017. These projects would not have become anything if it wasn’t for ICOs and instead they were left dependent on venture capitalists. This way ICOs have helped to take away power from venture capitalists and give that power to the masses.
A NEW GLOBAL CRYPTOCURRENCY
At the moment the U.S. holds the amount of economic power mainly because of the fact that the U.S. dollar is the world’s most popular currency. Cryptocurrency will be able to challenge that. Countries have now been trying to overpower the USD and become the global reserve but this is not possible because of international politics. Due to this deadlock decentralization would be a great way to overcome this problem.
BLOCKCHAIN CANNOT EXIST WITHOUT CRYPTOCURRENCY
Though there is so much negativity by the RBI, it is aware of the advantages of blockchain technology but seems to be against cryptocurrency. Experts believe that this would not work and does not make a lot of sense. Nischal Shetty who is the founder and CEO of WazirX (a cryptocurrency exchange) said, “Blockchain is useful as a ledger because the technology allows us to keep the data in the public domain and we will still be able to protect it. This is possible only because of cryptocurrencies. If you remove crypto from blockchain then the database will become so slow and inefficient that it will be worse than the existing system that the government is using.”
IF THERE IS A BAN WHAT COULD INVESTORS DO?
Even if there is a ban of cryptocurrencies it will not come into effect immediately. “There can’t be an overnight ban. Considering so many Indian investors have bet on these digital currencies, they will be given time and avenues to divest their stakes,” said Pramod Emjay who is a blockchain consultant. If there is no ban on possession then investors may decide to hold their cryptocurrencies and see later on whether they want to sell them. For e.g. A user a can transfer his holding to a person who is in a different country where there is no ban. That person can then easily sell the coins and transfer the proceeds back to the user.