RBI’S Order Will Blow Out The Cryptocurrency Business in India: Stakeholders
Ever since Reserve Bank of India made an announcement that it will not authenticate banks and other recognized financial institutions in the country purchase Cryptocurrencies in India, the cryptocurrency market has been facing a huge blow out. This has gotten for the cryptocurrency stakeholders and investors who are now thinking of winding up their operations here.
Rahul Raj, Co-Founder and CEO, Koinex, said,
“This unprecedented move by the RBI has stirred the market and impacted the industry at various levels. The exchanges have witnessed a steep decline in daily trade volumes and price fall for all tokens. In addition, traders who were looking at long-term investment through crypto assets will suffer heavy losses, especially those who have made hefty investments, out of their livelihood savings,”
However, Praveenkumar Vijayakumar, Founder and CEO, Belfrics Global says that this operation will not stagnate the cryptocurrency transactions in the longer run since people have a way of switching to third party operations. He also added that blockchain technology division at Belfrics is very active in India as they serve government and private enterprises for blockchain-related consultancy and product development,
“Before taking this decision, industry participants were not consulted, public debates were not initiated and public opinion polls were not undertaken. Even the findings of the committee were not published. The world is moving towards more efficient money and technology. We currently have billions of dollars being transacted in the form of cryptocurrencies, in a much more efficient and faster way than any central bank in the world can perform.”
Bharat Verma, CEO and co-founder, Pluto Exchange said,
“Nowhere it is stated that cryptos are illegal. The only thing which has been stopped is banking service. If anybody can justify the cash amount for which they buy or sell the cryptoassets, the trading goes on,”
RBI Deputy Governor B.P. Kanungo said made a comment in context of digital currencies,
“The RBI has cautioned on at least three occasions members of the public and users of virtual currency regarding risks they are exposing themselves to through these cryptocurrencies.
We have now decided to fence RBI-regulated entities from the risk of dealing with entities associated with virtual currencies. They are required to stop having a business relationship with entities dealing with virtual currencies forthwith, and unwind the existing relationship within three months”
Rahul Raj said that the knee-jerk move by the RBI has adversely impacted the industry, but the directive has also given financial institutions a time frame to settle all the pending transactions with the exchanges. So, effectively, this time allotted can be used by traders to wisely transact on their crypto-assets.
On the other hand, he is skeptical that this move by the RBI might lure traders to do under-the-table dealings or make small trade through direct cash transactions, which cannot be accounted or regulated.
“So, it might do more harm to the existing market and lead to illicit practices and black market. We are hopeful that the government will allow a dialogue to resolve this situation,”
People are still waiting for the government to bring out some positive decision regarding cryptocurrencies before cryptocurrency exchange platforms shut down their operations completely.
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