Note: “This analysis is an adaptation from the work of Mati Greenspan, Senior Market Analyst at eToro.”
- Cryptocurrency has potential to change large economies like India, where efforts are made to push digital payments and reduce paper currency
- India’s largest bank, State Bank, reduced limited of ATM withdrawals to push digital payments and reduce black money in the system
- Despite the push to digital payments, there is still no clarity on the status of cryptocurrency India’s Apex court may hear against the RBI ban in Mid-November
- Two of the Biggest Wall Street Banks give out divergent views on Bitcoin on its 10th Anniversary
Indian regulators puzzled on how to progress with cryptocurrencies
Regulators in India, the second most populous country and the largest democracy in the world, have not been able to make peace with the newest form of money- the Bitcoin. The country, to eliminate black money from the system, went into demonetization in 2016 which got rid of 86% of the paper notes in the country in just a few weeks. While that did eliminate the black money from the system at once, to keep the process going the country’s government is promoting digital payments under its digitization plan called Digital India.
Following the same modus operandi and progression on the same mission, the country’s largest bank, State Bank of India has reduced the daily withdrawal limit to just 20,000 Rupees ($270) a day so that there will be less unaccounted cash in the system preventing frauds and black money infusions. This reduced availability of cash would give a push to digital payments as well.
The other side of the story, while there is a visible push to the digitization of payments, the country is still confused about how should it progress with cryptocurrencies. While the Reserve Bank of India has imposed a sweeping ban on all crypto assets, the Apex Court about to give a decision on the same. The court has asked the government to submit their side of the case before a decision is pronounced in for mid-November. The hopes are pretty high that they decide will come in favor of cryptocurrencies, but still, implementation and building a regulation for the country’s regulators will be a daunting task- especially to make cryptocurrencies and centralized digital payment comes to operate in tandem
Here comes the challenge for the government as Crypto advocates in India continue to lobby the government and hope for a ruling in their favor, and if that happens parties in charge of digital payments in the country stand to lose a lot if crypto assets are made legal.
The great Wall Street is divided on cryptos
While that’s the India story, in the US, the Wall Street still stands divided on cryptocurrencies. On the 10th anniversary of Bitcoin, JP Morgan and Morgan Stanley gave divergent views on the Bitcoin. While Morgan Stanley sees cryptocurrency moving towards being an institutional asset class, JP Morgan’s says he doesn’t really give a s**t about it.