|
|
RBI's decree will shatter cryptocurrency business in India, say stakeholders
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 16 Apr, 2018
The Reserve Bank of India's announcement on cryptocurrency has not only
stirred the market but left both the traders and investors in a state of
loss with many of them thinking of wrapping up their operations.
"This
unprecedented move by the RBI has stirred the market and impacted the
industry at various levels. The exchanges have witnessed a steep decline
in daily trade volumes and price fall for all tokens. In addition,
traders who were looking at long-term investment through crypto assets
will suffer heavy losses, especially those who have made hefty
investments, out of their livelihood savings," Rahul Raj, Co-Founder and
CEO, Koinex, told IANS.
While Praveenkumar Vijayakumar, Founder
and CEO, Belfrics Global, said the announcement is an end of the road
for many Indian exchanges and a clear letdown for new investors, it is
not going to have much effect on cryptocurrency transactions in the long
run.
"As and when global prices advance, Indians will find their
way to get these assets through p2p (peer-to-peer) markets," he told
IANS.
"Nowhere it is stated that cryptos are illegal. The only
thing which has been stopped is banking service. If anybody can justify
the cash amount for which they buy or sell the cryptoassets, the trading
goes on," Bharat Verma, CEO and co-founder, Pluto Exchange, told IANS.
Last
week, the RBI, in its first bi-monthly Monetary Policy Committee
meeting of this fiscal, announced that regulated entities already
providing services to any individual or business dealing in digital
currencies have been given three months to exit the relationship.
"The
RBI has cautioned on at least three occasions members of the public and
users of virtual currency regarding risks they are exposing themselves
to through these cryptocurrencies," RBI Deputy Governor B.P. Kanungo
said.
"We have now decided to fence RBI-regulated entities from
the risk of dealing with entities associated with virtual currencies.
They are required to stop having a business relationship with entities
dealing with virtual currencies forthwith, and unwind the existing
relationship within three months," he added.
"This move by the
RBI might see an irreversible negative ripple effect across the
ecosystem. So, overall, the mood in the market is dismal," said Rahul
Raj.
The industry stakeholders also rued the fact that they were not consulted before RBI took its decision.
"Before
taking this decision, industry participants were not consulted, public
debates were not initiated and public opinion polls were not undertaken.
Even the findings of the committee were not published. The world is
moving towards more efficient money and technology. We currently have
billions of dollars being transacted in the form of cryptocurrencies, in
a much more efficient and faster way than any central bank in the world
can perform," said Vijayakumar.
Belfrics stopped its
cryptocurrency exchange operations in India when the banks had shut down
its accounts. "Our blockchain technology division is very active in
India as we serve government and private enterprises for
blockchain-related consultancy and product development," he added.
Headquartered
in Malaysia, the Belfrics exchange is currently active in Kenya, Dubai,
Malaysia, Singapore, Bahrain, Hong Kong, China and Indonesia.
"This
knee-jerk move by the RBI has adversely impacted the industry, but the
directive has also given financial institutions a time frame to settle
all the pending transactions with the exchanges. So, effectively, this
time allotted can be used by traders to wisely transact on their
crypto-assets. It is business as usual, at present," Rahul Raj said.
He
is also apprehensive that this move by the RBI might lure traders to do
under-the-table dealings or make small trade through direct cash
transactions, which cannot be accounted or regulated.
"So, it
might do more harm to the existing market and lead to illicit practices
and black market. We are hopeful that the government will allow a
dialogue to resolve this situation," he added.
But Verma is
hopeful that RBI will give detailed information and guidelines by the
end of June. "It appears as a positive decision in market of crypto."
Asked
whether he plans to wrap up his business, Verma said: "I will wait for
the right thing and right time. Going out is an option too, but any
decision right now will be too early to make."
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|