Bitcoin Banning Will Be Unprofitable for India
The attitude or willingness of becoming involved in the crypto industry is different in every country. It is not a surprise that every single country has different regulations in terms of cryptocurrencies and that is caused by several reasons. First and foremost, the main reason is that there is no agreement or shared idea about what cryptocurrency means and what it can be used for. For example, if people start buying bitcoin, what they can use it for? The fact is that this question was relevant before last year but a lot of events had an influence on it and the reality as of today is quite different.
The global pandemic made it possible for everyone to become aware of new changes in the financial market and to try for a new source of income as many of them were left without jobs. This is when the active PR campaign for cryptocurrencies began and many companies or outstanding people started promoting them. The main aim was to give a certain use to the virtual currency, where it was possible, for example as a payment method or in the entertainment industry.
Unlike money, which is used due to the agreed consent of people who decided that they would use something to exchange their values, bitcoin does not have the same purpose. This is why a lot of countries are looking at it in a skeptical way and with different regulations. India is one of them and the article will review the main characteristics of Indian policy towards cryptocurrencies that might be hindering its economy.
History of crypto in India
As well as the whole world, India got to know cryptocurrencies from Bitcoin at the beginning of the 2010s. Because it was a completely new fruit and people did not have a thorough knowledge of it, the government and RBI of India decided to make a warning statement that it could not be regulated, and their money would not be protected from unsuccessful transactions.
Despite this warning, in 2013 the boom of the crypto industry started in India. Many people became involved in the market and more and more people were buying bitcoin with the hope for future enrichment. In 2016 Indian government started the demonetization process which led to the increased popularity of Bitcoin once again.
At that time, there were two camps and two main ideas that came from those actions, one part, that was fascinated by the innovation and totally supporting it and the other, that was way against it and made the claim to the supreme court. The main justification for this was that the crypto industry was spreading over many other industries and people were risking a lot of their money.
Due to the decentralized nature of the transaction process and anonymity, it was impossible to track the transaction process that was conducted on blockchain and it caused inconvenience for the government. They could not understand where the national currency was fleeting from the country and considering that people were involved in illegal activity. It is true that at that time gambling with cryptocurrencies in India dramatically increased and the value of money that the government could not control was increasing as well. The gambling industry became very convenient and efficient for the people who were involved in it. After that, the supreme court prohibited the exchange of cryptocurrencies into real money, and banks were not given the ability to make the conversation. This is when people massively started selling their bitcoins not to lose their money. Those regulations are still under observation.
Many experts consider that banning Bitcoin in India is equivalent to rejecting US dollars. Without regulating and eventually adopting cryptocurrency as a reserve currency, experts believe that India’s economy would undergo a difficult process in the long term. The main explanation for this is that maintaining a crypto reserve is as important today as maintaining a dollar reserve. By banning crypto, India will finally result in the lowest reserve of the most important currency in the world and it would eventually lead to a currency devaluation of the worst form.
As it is very notable today, the country cannot develop its economy without international support and trade, especially when we talk about India. Economics, as well as many other fields, have a butterfly effect, and adapting to the new reality is very important in this case, as the world adapted to a new technological era at the beginning of the 21st century. When the country is banning financial activity, it can contain much more risks now, than several years ago.
Finally, to sum up, it is vivid that the world is changing very rapidly in terms of the financial market and when it comes to the economy it is very important to keep up with that as soon as possible. Different regulations or maybe some of the strict restrictions on cryptocurrencies were due to the skepticism towards its future. It was not vivid what people could use it for other than buying and then selling at a higher price, because with buying they made the demand increase on the coin on their own.
Some advanced countries and economies appeared to be ready for the innovation and they saw the spark in it that they could use to their advantage. During the last years, Switzerland started implementing Bitcoin as a payment method for railway tickets. In Japan, there are several places where you are able to pay by Bitcoin; most vending machines accept it. Germany is trying to implement it as payment as well, let alone the US and multinational corporations that accept Bitcoin as payment via conversion from the special application. However, the most notable achievement, in this case, has been implementing it as a payment method for Tesla, and now, people are able to buy a car by paying with Bitcoin.
If not make an innovative step from the Indian side to develop the market further, at a time it will have to at least make the same reality for Bitcoin and cryptocurrencies generally, for not to be left out from the global economic market.
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