NEW DELHI (CU)_A few months ago, sources revealed that the Indian government is expected to propose a law to cryptocurrencies and criminalise possession, mining, trading, issuance and transferring of these digital assets. According to Reuters, the sources claimed that the bill gives holders of cryptocurrencies up to six months to liquidate, after which they will be fined.
Nevertheless, according to industry analysts, there are about 15 million crypto investors in the South Asian nation holding over ₹100 billion ($1.37 billion), although there is no official data on the matter. Meanwhile, some of the top global digital currency exchanges, including US-based Kraken and Hong Kong-based Bitfinex are looking to follow the footsteps of market leader Binance, to set up in India.
Proponents of cryptocurrencies are of the view that a ban would supress the tech-savvy future of the economy which would be run by the young population of about 1.35 billion people. They also claim that digital currencies would be the most cost-effective way for non-resident Indians to remit funds home. However, given the unregulated nature of cryptocurrencies, authorities are concerned that criminals, as well as the wealthy population would hide their wealth in digital assets.
India is not the only government to take a sceptical view of the cryptocurrencies, as some of the most developed countries have warned the public over the risk of possessing, utilising and trading digital currencies. Earlier this week, Britain’s Financial Conduct Authority revealed that many cryptocurrency firms are not meeting its anti-money laundering and counter-terrorism financing rules and standards. Nevertheless, India does not have any particular laws or rules that govern cryptocurrency exchanges yet. Therefore, firms which provide such services are required to register themselves as tech companies which provides them with a relatively easy entry path.
A couple of years ago, market leader Binance acquired Indian cryptocurrency start-up WazirX, and has set up a platform that allows users to buy and sell digital currencies with rupees. Meanwhile, American cryptocurrency exchange platform Coinbase has also announced plans to set up a back office in the South Asian nation.
Meanwhile, the bill which was expected to be presented to parliament in March proposing a ban on cryptocurrencies has not yet seen the light of day. New Delhi appears to be holding back while various parties continue to make conflicting statements fuelling uncertainty over the fate of crypto assets in India. However, despite the risk, it appears that digital currency exchanges are convinced that it would be better to gain entry rather than miss out.
