Crypto industry executives have voiced disappointment over the continual indecision from the Indian parliament over the future of the digital asset ecosystem within the country.
Ripple CEO Brad Garlinghouse was one of the first to respond to a recent report claiming that India plans to introduce a new law banning trade in cryptocurrencies.
The fintech boss labeled it as a ‘disappointing’ move which would stifle one of the largest populations of unbanked people on the planet.
Disappointing to see India flip flop on crypto, hamstringing a nascent industry which could serve one of the biggest populations of unbanked/underbanked citizens. https://t.co/ffMUIQOnA7
— Brad Garlinghouse (@bgarlinghouse) September 16, 2020
Fellow executive, senior vice president of product and corporate development, Asheesh Birla added;
“India could be a formidable competitor to China, but is taking the “blockchain without crypto” angle instead …”
Another Indian Crypto Ban?
The Bloomberg report, citing people familiar with the matter, added that the bill is expected to be discussed shortly by the federal cabinet before it is sent to parliament.
“The federal government will encourage blockchain, the technology underlying cryptocurrencies, but is not keen on cryptocurrency trading,”
Politicians and bankers have been flip-flopping over the crypto industry for over two years now. The Reserve Bank of India had banned commercial banks from servicing crypto traders and exchanges in 2018, and that ban was overruled by the nation’s Supreme Court in March.
The report added that a 450% surge in trading in just two months since overturn in March revived concerns among policymakers over savings being lost during times of economic hardship.
Partner at New-Delhi based law firm Khaitan & Co, Sanjay Khan, said that India needs a regulatory framework to protect uninformed retail consumers;
“to ensure adequate oversight of the government and the RBI over cryptocurrency businesses. India can actually benefit from such a regulation to attract cryptocurrency investors and businesses.”
Currently, the RBI has acknowledged the Supreme Court’s ruling stating that it will not prohibit banks from dealing with crypto, but many of them have taken matters into their own hands and closed customer accounts.
Asian Crypto Situation
India appears to be taking a leaf out of China’s book, especially if it takes the path of an outright ban. Elsewhere in the region regulations have been put in place to both protect investors and allow healthy growth of the nascent industry.
Japan, South Korea, and Singapore all have solid regulatory frameworks for crypto assets and their trading. In Thailand, which is still ruled by a military-appointed government, the industry remains relatively open with regards to crypto trading and new exchanges are welcome providing they have the correct regulatory approval.