If you will look at the current price of Bitcoin and other cryptocurrencies, things aren’t looking good primarily because of the lack of regulatory clarity in different countries. And this has been pointed out by experts such as Tom Lee.
And for most regulators, they usually turn to research and even what other countries are doing in order to have the right take on their crypto market. There are even those countries who act a bit too late. Japan, for instance, announced to have new guidelines for its crypto exchanges after a recent hack. For India’s central bank, things aren’t quite usual. The government agency decided to close down bank accounts of crypto exchanges in three months without doing their research.
According to Varun Sethi who works as a lawyer in New Delhi, “It seems as if the ban was arbitrary and it came into effect without any thought from the RBI. It has either answered in the negative or given conflicting answers to questions what led to this ban”.
But is it really hasty on the part of the RBI? RBI still hasn’t banned cryptocurrencies today. And this means that there could still be hope. And when asked what led to the crackdown, questions to the central bank remained unanswered.
Is It Unfair?
There are already a number of exchanges that have been looking to appeal the decision of the central bank to the higher court. These businesses believe that RBI’s answers to why they are imposing a ban could actually add up to their case. These crypto exchanges believe that the reply of the Central Bank could be enough to build their case in the supreme court.
According to Nischal Shetty who is the founder and CEO of WazirX, “They came out with this ban, which has monumental consequences, without doing any significant research and so it seems like a completely superficial decision”. he also added that “There are other countries who are not comfortable with such currencies but none of them have banned it. Instead, countries like US, France, Germany, etc. have gone back to the drawing board and are trying to understand its dynamics”.
Sethi is still looking for more answers from India’s central bank. He is looking to file another RTI plea for this since he failed to have a meeting with RBI officials in order to fully understand the position of the central bank on this matter.
India is a large market when it comes to digital currencies. There are around three million virtual currency investors in the country. And in reality, a ban could ultimately hurt the entire crypto industry. Kunal Barchha who is the director at Kali Digital Eco-Systems mentioned that “the central bank needs to be more thoughtful” considering the number of individuals who could be affected by such decision.
If India’s Central Bank decided to ban crypto exchanges, they aren’t the first country that is going to do this. China has made such move last year. But in case RBI decided to withdraw its decision, it can help cryptocurrency’s struggling prices today.