Things aren’t looking great for people in India to invest in Bitcoin and other cryptocurrency. There’s a bill due to be tabled in this current session of Parliament that seeks to simply ban “all private cryptocurrencies” – which means everything other than Indian-government-issued tokens. This is the description of the bill on the Lok Sabha agenda (see item 12)
Just yesterday, the RBI governor said, in an interview with CNBC TV18: “…on crypto, we have major concerns from the financial stability angle. We have shared it with the government and government will consider and take a call.”
Now. In 2018, the RBI had forbidden banks from dealing with crypto-linked entities. That made it very difficult for people in India to convert INR to bitcoin/other crypto and back. It put a freeze on the entire industry. Then in 2020, the IAMAI association and a few other litigants successfully argued in the Supreme Court to overturn this ban:
But as the Economic Times reported last week, banks are regardless cracking down accounts that transfer money to/from crypto exchanges. A notice from HDFC bank says: “We have observed probable virtual currency transactions reflected in your account, kindly clarify the nature of these transactions by visiting the nearest branch within 30 days.” Ominous.
On the other side, India’s nascent crypto industry, mostly cryptocurrency exchanges, are doing what they can to mobilize public opinion. The founder of one of the country’s biggest exchanges wrote in a Financial Express column that
Banning [cryptocurrency] would be like banning the Internet in the 1990s and will set India back by years while the rest of the world moves forward.
and said that over 1 crore Indians have held crypto at some point.
I guess it’s not great being in the crypto industry in India. There is massive demand and curiosity among young investors in crypto and other alternative assets. But there’s been regulatory uncertainty since at least early 2018, which is a long, long time in an industry as fast-moving as crypto.