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The Indian crypto ecosystem is standing at a crucial juncture as the government is all set to introduce the much-awaited cryptocurrency bill in the parliament during the upcoming winter session. At a time when the crypto market is discussing the next move of the government, former central bank governor Raghuram Rajan has made a bold comment about the crypto market.
Rajan in a recent interview compared the current cryptocurrency market to the Tulip mania in the Netherlands in 17th century. He went on to predict that out of 6,000 odd cryptocurrecnies currently trading on various exchanges, only a handful will survive the ongoing regulatory phase. He said,
“If things have value only because they will be pricier down the line, that’s a bubble,”
Rajan stressed that the Indian government’s main focus should be on the underlying technology of Blockchain and decentralization. The comments made by former RBI governor comes at a time when the wordings of the crypto bill has already created a lot of speculations on a possible ban.
Will India Ban Crypto Use?
The Indian government’s stance as per insider reports have changed over the past 6 months. These reports have claimed that the government is planning to regulate crypto as an asset while prohibiting its use in the payment sector. However, the wordings of the upcoming crypto bill suggests a ban on private cryptocurrecnies barring a few.
The term private cryptocurrency seems to be the main point of conflict, given as per government’s definition anything that is not issued by them qualifies as a private form of crypto asset. However, security experts belive the government won’t take a blanket ban approach and only aims to prohibit the use of digital currencies for criminal activities.
The blanket ban approach hasn’t worked for any country until now be it China, Russia or Pakistan. Even Indian Central Bank RBI imposed a banking ban in 2018 which was later overruled by the Supreme court of India. Another aspect that could lead to favorable regulations is the fact that Indian crypto ecosystem has seen a massive rise over the past 2 years despite the uncrtanoty around the regulations.
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