Regulatory changes can either hurt or help the crypto market. In fact, the recent bearish market was contributed by regulatory changes. In 2017, China has completely banned crypto-related activities and is even hunting mining operations in the country. As for India, its Supreme Court refused to reverse the ban on crypto exchanges made by Reserve Bank of India.
On April 5, RBI directed all banks that they have three months to cut any ties with digital currency exchanges and traders. The ban is expected to start on July 6. Crypto exchanges fought by taking the case to the high court. In May, the court set the next date of the hearing to be on July 20 which is 2 weeks after the proposed ban. Internet and Mobile Association of India (IAMAI) requested the Supreme Court to have the hearing to take place on July 3.
According to Rashmi Deshpande, an associate partner at Khaitan & Co which is a law firm that represents Kali Digital Eco-Systems, an Indian exchange that plans to enter the market later this year, “This is a win for the RBI and a big blow to virtual currency exchanges and traders. In our earlier request to the RBI as well, we had asked it to extend the deadline by a month after the July 20 hearing”.
He added that “However, now that the ban will continue, the banking route for the exchanges and its users will be completely choked”.
Is It The End?
On the May 17 hearing, the Supreme Court asked exchanges to submit their representation against the Central Bank. Nicschal Shetty who is the founder and CEO of WazirX, an Indian cryptocurrency exchange, “We had submitted a detailed presentation that could have given RBI a clearer picture on what is blockchain, how the exchanges work, etc. But we hadn’t heard back from them yet”.
Though the Supreme Court refused to lift the ban, exchanges are still hopeful. Currently, the Nerendra Modi government is in its final phase regarding the draft regulation on Bitcoin and cryptos.
Subahash Chandra Garg who works as secretary in the department of economic affairs said that “We have prepared a draft (on virtual currencies) that entails what parts of this business should be banned and what should be preserved. This should be discussed by the first week of July and we should wrap this up within the first fortnight of July”.
Regulatory Changes Happening Worldwide
There are regulatory changes happening worldwide. And in reality, governments are looking after the interest of users as well. There are cases of money laundering related to cryptocurrencies while hacking incidences are also quite rampant today.
How exactly does the Supreme Court’s decision to not lift the ban affect crypto trading? Currently, Bitcoin and other cryptocurrencies experienced losses after regulatory changes. Though Bitcoin is currently trading above $6,000, will this recent event scale Bitcoin’s price back?
Now, all eyes are on the government regarding the law that they are going to come up with. Will this be pro-crypto or will this make it difficult for traders and exchanges to do crypto-related activities?