Government has been publicly against allowing crypto exchanges function in India
A draft bill had earlier proposed a ban on the use of cryptocurrency in India
NEW DELHI: The Supreme Court quashing the Reserve Bank of India’s order that banned financial services firms from trading in cryptocurrency has been well received by the industry, but most still remain wary of taking the next step.
The general thinking in the industry seems to be that the SC’s ruling is only the first step, and it can’t yet trust a government that has been publicly against allowing crypto exchanges and startups function effectively in India. “There’s still a bill that the Parliament has to discuss. It has changed shapes and forms but hopefully this will be the framework for how cryptocurrency is traded in the country," said Prashant Swaminathan, founder & CEO of Tandem, a peer-to-peer (P2P) Bitcoin trading platform.
A draft bill had earlier proposed a ban on the use of cryptocurrency in India and also a jail term for those dealing in it. Stakeholders in the industry say that while the SC’s verdict is certainly going to increase confidence in India, regulations are more important.
Regulations will clarifyhow much freedom cryptocurrency businesses and exchanges will have to operate in India. That’s important for big global exchanges to make their entry into the market and for Indian startups to do well. “India is a big market, but a lot of companies have kept away from the market," said Vincent Poon, vice president, Bithumb Global, one of the largest cryptocurrency exchanges in the world.
Poon said many of his peers have been taking note of the SC ruling, meaning it could open doors for global companies to come into the market. But he agreed that the ruling was only the beginning and without regulations and a legal system, India wouldn’t be a concrete market for those firms to explore.
On the other hand, most executives agreed that the SC’s ruling clears any confusion around the legality of using cryptocurrencies in India. “People who were questioning the legality of cryptocurrencies will now realise that their perspectives were wrong, and only banks were barred from dealing in crypto," said Sathvik Vishwanath, CEO and co-founder of Unocoin, a well known cryptocurrency processor in India.
“I think what’s likely to happen now is that (Indian) exchanges which had shut down after the RBI’s order will reopen," said Vishal Gupta, founder of multiple crypto-based startups, like SearchTrade and Binex. “No one will be looking to make any fresh investments, but the existing businesses who have already set up shop (will benefit)," said Gupta.
Gupta expects the total trading in cryptocurrencies will increase right now. “Volumes in the Indian market could increase by 100, 200 or even 500 times," he said. Before the ban, Indians traded approximately 2500 bitcoins per day, according to Gupta. He expects the number to be even higher in the next three to four months.
The common consensus seems to be that it’s too early to call anything based on the SC’s ruling. “At the outset, what it looks like is that at least common sense has prevailed. But I wouldn’t go far as to say that this is the start of positive regulation for crypto," said Raghu Mohan, co-founder of IBC Media.