In this article, we are going to shed some light on RBI’s decision to ban cryptocurrencies in India. We are going to learn in detail about the RBI governer’s sudden decision, its meaning, its effect on Indian cryptomarket and our views.
Controversy by RBI
The governor of RBI, Mr Kanungo announced on 5th April 2018 that they are going to ban cryptocurrencies from India. According to the latest news, all the banks associated with the central bank will have to stop their services to companies and individuals related to cryptocurrencies. Furthermore, the government believes that overuse of cryptocurrencies like Bitcoin ultimately leads to economic disturbance. The government has prohibited entities from providing services to any individual or companies dealing with cryptocurrencies. For which, the central bank has given a period of three months to regulated entities like banks to unwind their decision.
However, the governor also said that it will promote the use of blockchain. Blockchain technology serves as the backbone of cryptocurrencies. It is because of this technology that people consider cryptocurrencies as a secure and fast means of transaction. Mr Kanungo also said that they will soon come up with a fiat digital currency. This digital currency will be in circulation along with the paper fiat currency.
This news resulted in a major dip in the Indian cryptomarket. Cryptocurrencies saw a dip of nearly 30-35% in a matter of few hours. All the coins that were trying to recover from the recent bear run were thrown down in the red bloodbath due to this recent news. This news did not affect the international market on such a huge level, but it thoroughly crashed the Indian market. Small-time investors and immature HODlers did panic and sold coins at cheaper rate creating a larger dip. Moreover, the FUD created by media on various social platforms ensured that the cryptocurrency’s image is tarnished to the maximum extent in the minds of Indian investors.
Is this a bad news for cryptocurrency investors from India? Yes.
Is it the end of cryptocurrency in India? Absolutely not.
Yes, this is a bad news for everyone involved with cryptocurrencies in India. But the news is not as bad as the government and media are portraying it to be. On one hand, the governor has said that trading in cryptocurrencies like Bitcoin will effect economy in long run. But on the other hand, the government is trying to come up with its own fiat digital currency based on blockchain technology. According to the governor, trading in cryptocurrencies is risky and not beneficial for the general public in future. But, the government is completely happy with the idea of using government’s own digital currency. Is the insecurity of government losing control over the people’s money a reason for this decision? Is the fact that government can generate no income in cryptocurrency transactions from people a major factor? And how much can the government’s execution of blockchain technology be trusted?
Such news of cryptocurrency banning has come in the past. And much more news is going to come in future. South Korea and China were very first countries to put a ban on cryptocurrency trading. And today, these two countries hold a major chunk of crypto market investors in the whole world. Government’s ban on their country’s cryptomarket didn’t stop them from investing in cryptocurrencies. And it won’t stop us. Moreover, RBI is yet to issue an official circular regarding this ban, so different news always awaits. Don’t FUD, Just HODL strong.
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