In recent times, there has been a huge scare regarding cryptocurrency trading in India. This is because the Indian government has been deliberating on whether or not to ban cryptocurrency trading. According to the latest report, the Central Bank of India issued an announcement yesterday regarding cryptocurrency trading. According to the Central Bank of India, there is no ban on cryptocurrency transactions in India. This news has injected a booster into the cryptocurrency market, which has recently been suppressed by global regulations. Cryptocurrencies such as Bitcoin and Ethereum have risen sharply at the beginning of this week.
In its latest announcement, the Bank of India told banks not to use the 2018 central bank announcement as a reason to hinder cryptocurrency transactions. The Central Bank of India’s circular at the time prohibited banks from facilitating such transactions but was later rejected by the Supreme Court of India. The Central Bank of India also pointed out that banks must continue to take other regular due diligence measures on these transactions.
In March this year, the Ministry of Corporate Affairs of India revised the “2013 Company Law Schedule III”, requiring listed and private companies to disclose their cryptocurrency holdings and other activities using digital currencies.
Why is the Indian government skeptical about cryptocurrencies?
Just like many governments around the world, the Indian government has its reservations on cryptocurrency trading. A couple of Indian government officials believe that cryptocurrency is a “Ponzi scheme”. A few years ago, there was a proposal that defaulters of cryptocurrency restrictions should face up to 10 years in jail. Furthermore, some banks in India believe that cryptocurrency trading will increase the risk of financial instability.
An Australian regulator claims that “60% of financial crimes in the country have links to cryptocurrencies”. In Nigeria, there is a ban on cryptocurrency transactions with commercial banks. The Indian government is towing a path that many governments of the world will like to take. However, they need to apply extreme care to ensure that they don’t lose out. Obviously, the law is not on the government’s side and it becomes really difficult.
Despite all the threats from the governments to punish crypto traders, the Central Bank of India now says otherwise. According to reports, about 8 million Indians now have 100 billion rupees (approximately $1.4 billion) of cryptocurrency.
Reminder: Cryptocurrency investment is risky, and you need to be cautious when entering the market. Digital currency investment has greater risks and unpredictability, and this article does not constitute any form of investment encouragement and advice.