Is Bitcoin Really Banned In India?

adityavijayr (40)in #india • 7 years ago (edited)

After the Indian Finance minster Arun Jaitley, in his budget speech on February 01, 2018, stated the following in the budget speech:

“The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system”

The Cryptocurrency Investors were trying their best to hold their panic, tossing the Crypto Markets into uncertainty from the path of slow recovery. However, yesterday 5th April, 2018, was one of the breakthrough or the breaking point for several virtual currency/ crypto investors in India. As the RBI (Reserve Bank of India) announced regulatory policy measures for strengthening regulation and supervision; broadening and deepening financial markets; improving currency management; promoting financial inclusion and literacy; and, facilitating data management.

Wherein one of the points Raised in the announcement relating to virtual currencies (VC), including Bitcoin were as follows: (video available)

RBI Press Release :Statement on Developmental and Regulatory Policies, Apr 05, 2018

13. Technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system. However, Virtual Currencies (VCs), also variously referred to as crypto currencies and crypto assets, raise concerns of consumer protection, market integrity and money laundering, among others.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. A circular in this regard is being issued separately.

Not by surprise this statement has been over-exaggerated by the Indian Media. Unfortunately, things have veered in a less favorable direction due to this news. Several of the major daily and television news had hyped the above statement to be a blanket ban. Alongside the above there has been speculations and affirmations of India starting its own central digital currency.

To start with, there is a huge gap between what is conveyed and what is understood by the media which in-turn has resulted in this panic sell mode dropping the Indian bitcoin market prices low. The RBI only has notified the banks or "entities regulated" to stop the dealing and providing services to individuals and businesses dealing with VC and such regulated entities shall exit such relationship within specified time (3 months).

This makes it clear that the said is applicable to banks and to an extent does not even cover Indian Crypto exchanges as they are not "entities regulated" under RBI. As it is clear when Indian Reserve Bank made a caution call on virtual currencies previously, while stating the potential financial risk, as it is unregulated and that it is not responsible for any losses. This only exposes Achilles’ heel of the government making it blow hot and cold.

It is sure that we will have regulations and these are the steps adopted in its passage. However, even if the VC's or Bitcoin is banned the question as to that it is the end for bitcoin or VC's? Certainly the answer is No. As it is not controlled by any government but a peer to peer cashless system. Hence, such statements are rather confounding.

So what is that we can expect:

As individuals

Those who are still concerned about the situation they will take funds out irrespectively.
Your digital assets are safe and can be transferred to other exchanges across world and still be traded.
As far as fiat money stuck in exchange wallets there is a window period as announced to make withdrawals.
As far as mining is concerned it shall have no effect.

As Exchanges

There is no ban as of now on exchanges as they are not regulated entities under RBI.
The banks partnered with or which allowed transfer of money to exchanges from individuals shall stop.
There is a window period of 3 months to deal with the bank transactions to clients.
The business shall still continue to function

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Legal Disclaimer: The author is not an financial expert in analysing crypto market or market trends. All information provided are only informational and the author does not claim accuracy of any cited resources. Further, this shall not be considered as any form of investment solicitation. The viewers and the users of the above information are strictly advised to consult a professional and/or exercise their own judgment for the above or similar forms of investment matters. The author of the above information shall not be liable for any losses which may result from the exercise of such information contained herein.

#cryptocurrencies #bitcoin #rbi #cryptoban