India’s Cryptocurrency Market Hobbled By Reserve Bank of India Measure
While there’s some evidence to suggest that cryptocurrency may ultimately be the mobile payment system of the future, there are plenty of entities looking to prevent that from happening. The latest salvo comes from India, whose Reserve Bank of India (RBI) has recently put a serious hamper on the whole crypto trade in the country.
The RBI has declared a ban on any institution that it regulates “…dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies.” This means that anyone who was going to use money from their bank account to buy cryptocurrencies is effectively barred from doing so.
This move follows repeated warnings, cautions, and various other scolds from the RBI about the purchase and use of said currencies. Apparently, the RBI got tired of no one paying much attention and instead decided to burn the whole thing to the ground. Given that the RBI not so long ago released a press release that said everyone who was investing in crypto did so “…at their own risk,” the move to unilaterally declare the market too risky for anyone rings a bit hollow.
It’s raising a specter of doubt, especially after what Citi did not so long ago in shutting down access to crypto for the individual investor. If India can pull a blanket move like this, then what’s to stop anyone else?
What’s shocking about India’s move is that, for a while, it was content to merely wag its finger and tell everyone how super dangerous crypto was, and how it shouldn’t be played with. When no one cared and continued to play anyway, India slammed the lever from “passive” to “aggressive” and decided to take all the toys away. This isn’t to say that India won’t continue in crypto—note the key phrase of “RBI-regulated”, which means anyone who’s not under the RBI’s thumb is still in play—but the trade will likely at least go underground
There have been huge gains made in crypto, and probably more huge losses. This is still a very young market and a very new technology, so only time will tell where it goes from here. The overly-restrictive “ban everything” approach, however, is more likely to leave its user out of any future gains.