The Reserve Bank of India finally released a statement about the government’s views on cryptocurrency and crypto assets. The RBI issued a directive on Friday morning giving all RBI regulated organizations three months to cut all ties with individuals and entities that deal in cryptocurrencies and other crypto related projects.
After the statement, the price of Bitcoin listed on Indian crypto exchanges crashed, presumably due to large selling. The price crashed from about Rs 500,000 to about Rs 340,400.
In the same breath, however, the RBI also announced its own digital currency
“While many central banks are still engaged in the debate, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency.”
The pattern that seems to be emerging worldwide in countries that have outrightly banned cryptocurrencies is that after a blanket ban, the government seems to launch their own digital currency. After banning cryptos, the Venezuelan government then went ahead and launched Petro, its own digital currency.
The Chinese government also instituted a blanket ban on virtual currencies & crypto products, but the crypto industry in China is not just surviving, but thriving. In recent news, a member of China’s top political advisory board has proposed the launch of a government regulated blockchain and cryptocurrency platform. The advisor, Wang Pengji is quoted saying,
“lack of mature independent intellectual property rights […] will not be good for China’s financial security in the long run.”
Sense a pattern here?
Additionally, the RBI’s statement is not the end of the world. There are many peer-to-peer platforms that exist that facilitate the direct trade of crypto assets. One such platform that exists is Paxful. The CEO of Paxful Ray Youssef is quoted saying,
“ First the government of India worked to ban cash so the people turned to a peer-to-peer currency like bitcoin. Now, bitcoin is their target but the best they can do is shut down centralized exchanges. The people will now go fully peer-to-peer and get their bitcoins from each other via OTC [Over The Counter] exchanges. They cannot stop this short of shutting down the internet.”
The next report of the Reserve Bank is expected in June, and Indian crypto investors will have to wait to see the next steps that the Indian government will take to shut down private crypto exchanges and products.