The government of India’s rhetoric against crypto assets is on the verge of acquiring a new crescendo. As per a latest cryptocurrency news source, this decision is set to take place in the aftermath of the elections. The country’s emerging crypto-related businesses too have been similarly afflicted in a watershed moment. For the country’s crypto future remains uncertain as it is time for the government to arrive at a decision after postponing the decision, time and again.
India’s highest court on March 29 adjourned the ‘Crypto vs RBI’ case in minutes in accordance to the request of the Indian government. This left the community in a state of utter dismay as it would have led to clarity about the final decision pertaining to cryptocurrencies. Of late, the narrative surrounding crypto assets in the country has been rather bleak; with various news sources indicating that the government is likely to impose a complete ban on cryptocurrencies under the Prevention of Money Laundering Act (PMLA). The reason being that cryptocurrencies are perceived as havens for money laundering, scams and a means to finance illicit activities.
Is this true?
On the surface, money laundering seems like a pertinent point of concern, with several instances of people who seemingly cheated the system being widely prevalent; the cases of Nirav Modi and Vijay Mallya immediately come to mind. The latter owes Rs 9000 crores to various Indian banks and is in the process of getting extradited by Indian authorities. In case of Nirav Modi, he is accused of being involved in criminal conspiracy and is wanted by Interpol for criminal conspiracy.
Since these were scams involving fiat currency, why not just go ahead and ban fiat?
Should India go the ban route then it would circumvent the country’s prospects in what is a promising and innovative technology that serves as the perfect foil to the existing monetary system.
Conversely, adopting crypto-assets and bringing in regulations could stand to immediately benefit the country. According to a cryptocurrency influencer, as the largest receiver of remittances in the world, India, by ad cryptocurrency opting crypto assets could add billions of dollars to its GDP. It could also become a hub for crypto and blockchain innovation in Asia.
The road ahead
A knee jerk reaction to the dismal narrative surrounding cryptocurrencies is only going to be counterproductive. Being decentralized, a government ban would chaff out genuine investors and impel the creation of a parallel economy. It’s a catch 22 situation and only by regulating crypto assets would the government regain some semblance of control.
Presently, there is a lack of awareness about how cryptocurrencies function as a form of technology. In case of conventional investments such as stocks, the early days had their fair share of scams. In the Indian context, many would remember the Harshad Mehta scam. However, instead of banning stocks, a number of regulations were brought forward to keep the stock market in check.
There is no official statement from the government about banning cryptocurrencies. Traders in India should not panic about rumours from unnamed news sources. Bitcoin is presently doing well and is soaring to new highs. Eventually, the narrative surrounding crypto assets is bound to change and early adopters shall soon reap the benefits of a tokenized economy.