According to Coindelta co-founder Shubham Yadav, India's cryptocurrency exchanges can no longer provide legal currency-to-cryptocurrency trading services, and their business model has been transformed into currency trading.
The central bank’s cryptocurrency ban is still being implemented
In April this year, the media reported that the Reserve Bank of India, the Indian central bank, for the first time issued a ban on cryptocurrency trading, effectively prohibiting domestic banks from providing banking services to cryptocurrency exchanges. On July 3, the Supreme Court of India refused to lift the ban on cryptocurrency trading by the Bank of India, reaffirming that Indian banks cannot provide services for cryptocurrency exchanges.
Although the Supreme Court of India is expected to hold a hearing on the case of the Indian central bank’s ban on the cryptocurrency industry, the local exchange will not be able to provide legal currency to cryptocurrency trading until the Supreme Court of India officially lifts the existing ban on cryptocurrency transactions. .
In an interview with Quartz, Yadav, founder of Coindelta, a local cryptocurrency trading platform in India, said that local exchanges have switched from cryptocurrency transactions to currency transactions, and are currently competing with mainstream exchanges such as the currency.
In this way, for Indian investors, in order to trade digital assets, they must first rely on P2P platforms such as LocalBitcoins to purchase bitcoin, and then trade other cryptocurrencies on the currency exchange.
Yadav expressed concern about the dangers of relying on the P2P market and using such platforms, because we don't know the personal information of investors and users of these platforms. He said:
“There were a lot of such transactions done offline, which could lead to users being cheated. Even if you trade online, you don’t know who the trader is, and the deal may not be successful.”
India’s cryptocurrency ban may cause the country to be lagging behind in blockchain competition
More importantly, if the Indian Rupee cannot be used directly for trading, the enthusiasm or motivation of domestic investors to use local exchanges will not be too strong. They would rather invest in mainstream exchanges such as Coin, Bittrex and Firecoin. Previously, Indian exchanges served the local market, dealing with legal currency transactions on cryptocurrencies. A few months later, local exchanges were forced to transform and compete with billion-dollar platforms that were influential and resource-rich.
Belfrics, a Malaysian cryptocurrency exchange, also has operations in India, and its chief executive, Praveen Kumar, said that it would be difficult for India's cryptocurrency exchanges to survive and develop without the legal currency transaction. The surrounding countries have implemented actual regulatory frameworks and policies to promote the growth of local cryptocurrency and blockchain businesses, and India is far behind. Kumar said:
“In the meantime, we are also taking some measures, but in order for the industry to survive and thrive, we must allow for legal currency transactions. Otherwise, we will eventually compete with all other global exchanges that offer currency transactions or P2P transactions. ”
Too strict supervision will stifle market vitality
Major economies, including the United States, Japan, and South Korea, have begun to implement more practical and effective regulatory measures to ensure that cryptocurrency exchanges, blockchain projects, and infrastructure can grow rapidly without being too strict Policy implications.
While mainstream countries have recognized the potential of cryptocurrencies and blockchains, the Indian government has decided to put itself behind in this blockchain competition and the fourth industrial revolution. In the long run, the price may be It will be quite high.