As the RBI hardens its stance and bans banks from dealing with cryptocurrency entities, many Bitcoin investors and exchanges have preferred to HODL (Hold Your Cryptocurrency) until more clarity comes from the government end.
An online petition has also been started at Change.org, asking the RBI to take back its circular. Addressing the RBI and the Prime Minister of India, the petition ‘Make India at the forefront of Blockchain Applications revolution’ has been filed under the name ‘Digital Asset Exchanges of India’.
The petition, which has already been signed by almost 7.7K people, read, “Crypto and blockchain as a concept can’t be stopped. You can just decide whether you want to participate with full throttle or get left behind. The current stance from the government shows they would want to remain left behind after missing the internet revolution first, AI revolution next and now blockchain revolution.”
Nischal Shetty, co-founder and CEO of WazirX Bitcoin Exchange tweeted, “US, Japan, South Korea go towards regulating Cryptos so that their country progresses while RBI decides to block Indians from getting involved in the crypto revolution. We need to think progressively, @RBI please reconsider this and let’s take a positive step forward.”
WazirX was the first exchange which posted an immediate reaction on its Medium blog after the RBI press conference yesterday. The statement read, “The announcement today mandating banks to not allow people or businesses in India to deal with cryptos may push us back in time and make us all miss this golden opportunity. Knee-jerk reactions like these are what can cause the future generation to be left behind when the rest of the world moves ahead.”
While Sathvik Vishwanath, co-founder and CEO of Unocoin told Inc42, “We are looking at the issue and studying how to deal with this,” Ajeet Khurana, CEO of Zebpay tweeted, “No way I am stopping. We will continue to do what is best for our customers, and what is best for our country. Am studying the present situation and will react shortly and we will emerge stronger.”
The post further stated, “The very ethos of democracy is to involve the common people in critical decisions like these. Unfortunately, no one has bothered to involve any of us while deciding the fate of cryptos. There are many Indians who are not part of the government but who understand the underlying technology and its use cases very well. We could all have helped formulate a plan that would have avoided this harsh decision.”
As it seems, the banks were apparently aware of the announcement.
Many banks had already started freezing accounts of cryptocurrency exchanges. While ICICI bank abruptly closed the Belfrics India exchange account, Oriental Bank of Commerce too recently released a circular instructing all its branches to freeze all the accounts pertaining to cryptocurrency entities.
The central bank has given three months to the banks to settle their businesses with entities and consumers dealing with cryptocurrencies. However, leading Indian banks including the HDFC, AXIS, YES, ICICI and Kotak Mahindra Bank have already stopped most of their services to cryptocurrency exchanges and other entities and traders.
So, what will be the way forward for the exchanges and cryptocurrency traders in India?
Naimish Sanghvi, founder, Coincrunch gave three insights:
- Indian exchanges will have to move to a crypto-to-crypto model. Not sure if they will be allowed though.
- Publications like my Coincrunch will have to close down.
- Users will find illegal ways to acquire Bitcoin
The RBI has, meanwhile, already constituted an inter-departmental committee to explore the viability of having its own fiat cryptocurrency. The Committee is expected to submit its report in June, this year.
After the ban, the darknet concerns are real as cryptocurrencies are still being traded frequently in China, despite the ban. While earlier, the cryptocurrency trading was a mix of white and grey which has now turned to fully grey zone.
India might face a similar situation. As N.S. Nappinai, Advocate, Cyberlaw Supreme Court stated, “Even if you treat cryptocurrencies as your enemies, then it is advised to keep your enemy closer, under the ambit of certain rules and regulations.”