India is a country where both Bitcoin and other cryptocurrencies are experiencing a real rollercoaster. There have been multiple reports of a potential complete ban on trading virtual coins within its borders. These have often stirred up significant traffic on exchanges. After all, we are talking about the second biggest country in the world by population. Cutting off 1.37 billion people from the ability to legally invest in the cryptocurrency space has every right to have an impact on the global value of the market. There is, however, some light in all this confusion. India has decided to consider new regulations and turn positive towards Bitcoin.
Which way is India headed?
Amidst a lot of negative signals, The New Indian Express presents a very positive news. The daily citing various sources communicated that the Indian government is considering qualifying Bitcoin as an asset class. One of the reasons why such a move is being considered is allegedly due to the adoption of Bitcoin as legal tender in El Salvador. According to insiders, Securities and Exchange Board of India (SEBI) officials are expected to take a look at the current tightening of the cryptocurrency market and revisit options for its regulation and subsequent oversight.
A recent statement by the Reserve Bank of India (RBI) governor also made the rounds in the media, putting the case as follows:
“We can confidently say that the appointed new committee that is currently working on cryptocurrencies is very optimistic about regulation and legislation. The new draft proposal will soon be in the cabinet, which will look at the overall scenario and take the best possible step forward.”
The daily reports that top representatives of the crypto industry are already negotiating with the Ministry of Finance on the shape of new regulations. These are expected to go before parliament between June and October this year.
Bitcoin’s bumpy road through India
In 2018, the RBI banned cryptocurrency trading in the country. Thanks to the determination of industry entrepreneurs, the Supreme Court dismissed this ban. This does not at all mean that trading was allowed to take place freely. Uncertainty about further regulations remained, mainly due to the actions of the then Finance Commissioner. Subhash Garg made his position clear in 2019, wanting to ban cryptocurrencies altogether. Over the past few months alone, news of alleged further restrictions against which cryptocurrency investors could even be sentenced to jail terms has repeatedly reached us. The rhetoric changed when, at the end of May, information came to light that the RBI had instructed banks not to avoid transactions linked to the crypto asset market.
Bullish scenario for India, but uncertainty remains
Undoubtedly, the latest news coming out of South Asia is cause for optimism. However, India’s regulatory history means that we still can’t be sure whether this rollercoaster is already reaching its final station or whether it’s just a temporary pause before the next loop of events. Speculators have doubts about the shape of potentially upcoming regulations. However, in terms of past events, whatever they may be, they appear to be much better than a ban. The recognition of Bitcoin and other cryptocurrencies as an alternative asset class is the breakthrough that not only India but the entire crypto world is waiting for. After all, it is important to remember that this one country accounts for almost 18% of the population of the entire globe. Simply put – it’s a huge market.