The central bank has just banned money transfers coming from Indian banks that are to be exchanged for cryptocurrency.
The Reserve Bank of India has also banned money transfers from bank accounts to Bitcoin wallets. This means that all cryptocurrency related services can no longer go through RBI to facilitate any kind of sale. For investors, this also means that they cannot approach crypto exchanges anymore for any kind of trade using fiat.
A portion of RBI’s Statement on Developmental and Regulatory Policies states:
“Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time.”
One of the most affected parties here is the CEO of Belfrics Indian cryptocurrency exchange Praveen Kumar. If any sort of crypto business is to thrive within India under these conditions, it may need to be done underground.
As can be seen in the price of Bitcoin, the recent cryptocurrency related bans by popular companies such as Google and Facebook has shown to have an impact. Thankfully, India does not have a big share in the crypto trading economy. After word of the ban was released, the price decrease was only at 2% which may even mean it was not be driven by RBI’s ban.
Since the massive increases in prices of cryptocurrencies in late 2017, the market has not been introduced with anything new. Investors are on standby for some new wave of hype, but nothing of value seems to come up. Just more of "mediocre coins from mediocre startups" as investors would call it.
With the country-wide bans by China and India, investors are well aware of the nature of cryptocurrency industry and the challenges it is facing now.
Although many other countries still allow cryptocurrency transactions, more of them intend to regulate their use. On the bright side, more use cases have been developed for cryptocurrencies and blockchain technology. Ripple is gaining traction with its unique features for cross-border transfer, some countries such as US and Sierra Leone have tapped blockchain based voting, Google’s consideration for developing blockchain based services, etc.
2017 was definitely the year of the crypto. Today, it is simply not as easy to earn on cryptocurrencies. Investors last year might as well have gambled on any cryptocurrency and gain five times its original value in a week’s time.
Today, a cryptocurrency project needs to have a solid roadmap with great execution to gain the trust of investors. Any kind of failure on this area spells the difference more profoundly than any ban made by central banks.