Three months ago, Central Bank of India had instructed all the other banks of the country to end any ongoing relations with cryptocurrency companies. As Reserve Bank of India’s (RBI) deadline ended, the matter is still to be heard before the Supreme Court on 20 July. On 6th April, RBI had released a circular to which Delhi High Court didn’t grant an injunction. For now, the banks have stopped providing banking solutions to all cryptocurrency-related firms.
Once the RBI ban comes into play, most of the trading will possibly shift to social applications like Telegram according to reports. Certain exchanges like BuyUCoin and International Asset Platform (IDAP) have reportedly planned to move their base to another country in order to avoid the prohibition.
As most of the cryptocurrency experts are not happy with the crackdown, CEO of IDAO Awanish Rajan told media that such moves will turn the spirit of entrepreneurship negative. He added that even though RBI intended to protect the public, treating cryptocurrencies as inherently bad is not the right step forward. He also stated that because technology can be misused, the government can talk to people involved in blockchain and cryptocurrency in order to form the rules together. This will benefit both public and startups engaging in this new technology as the ill effects will be eliminated, Awanish concluded.
Senior vice president of CoinSwitch Sharan Nair also told media that the trading of cryptocurrencies will be restricted to OTC (over the counter) and P2P platforms. He believes this to be a setback for exchanges and blockchain companies that are aspiring to build world-class products/services using the new technology.
Even after the ban takes effect, it is suspected that cryptocurrency will survive the industry somehow.
What an Indian Bitcoin holder can do?
A bitcoin holder can choose to retain the currency, but cannot convert them into rupees or use it for any kind of trade. The exchanges of cryptocurrency in India have sent emails and uploaded notifications on in order to alert users about the inconveniences.
Some of the options to continue trade include social applications and Peer-to-peer (P2P) trade. According to reports, certain exchanges including Koinex and WazirX have been working on P2P projects in order to enable the virtual currencies without the use of banking channels. An individual will be able to sell cryptocurrency through the P2P model by informing the exchange and locking the currency. They will have to further wait for the buyer to pay them through a bank account. The currency will be provided to the buyer soon after the confirmation from the seller through the exchange firm. RBI had also hinted a launch of their own digital currency similar to blockchain and bitcoin model.
In whatever way cryptocurrency is of value to an individual, they will have to wait for the hearing on July 20 to get clarity on their options.