With the recent cryptocurrency ban in India, many people have questions about what’s next for cryptocurrency trading and use in India. The central bank of India banned cryptocurrencies on December 6th, citing concerns around consumer protection and security, as well as potential money laundering or financing of terrorism risks. But what’s really going on here? And what does it mean for future cryptocurrency adoption in India? Let’s dig into the details and find out more about the Indian cryptocurrency ban.
Information about Digital Currency
The term cryptocurrency is used to describe digital currencies which run on cryptography. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. For example: bitcoins are completely decentralized and there’s no single institution holding all of that currency in one place like a bank account.
Changes in the Legislation
Though cryptocurrencies are still not considered legal tender in India, several exchanges were started in late 2017 and early 2018 to allow people to trade in cryptocurrency. Additionally, there has been a lot of support for these currencies from Indian Government bodies like RBI (Reserve Bank of India) and SEBI (Securities and Exchange Board of India). It is expected that we will see some kind of legislation regarding cryptocurrencies in 2018.
The Current State of the Market
The last few months have been nothing short of a roller coaster ride for crypto investors. Starting with what was just another news cycle, in which regulators around the world were warning about virtual currencies, crypto prices fell from their all-time highs of $869 billion on January 7th to as low as $539 billion by February 6th. That’s over a 30% drop in only 3 weeks and it marked an end to what was previously seen as a stable market for cryptocurrencies.
The Controversy Surrounding Bitcoin
While Bitcoin has gained enormous popularity in India, its legal status remains unclear. It is unclear whether it should be considered as a currency or a commodity (like gold). Bitcoins are not recognized by any country and thus no laws apply to them. However, traders often use Bitcoin to make their transactions untraceable, which can have its benefits in some situations but also raises many concerns related to consumer protection. The Reserve Bank of India (RBI) has previously issued three separate warnings against using Bitcoin or other cryptocurrencies.
How Does Crypto Work?
A lot of cryptocurrency lingo is confusing, and even experienced enthusiasts often get it wrong. Here’s what you need to know: cryptocurrency is built on blockchain technology (like bitcoin), which in turn works through a distributed ledger. In other words, ledgers are shared between multiple parties so that no one person has full control over everything stored on it. There are two major benefits of distributed ledgers: transparency and security.
Should You Invest In Indian Cryptocurrency?
cryptocurrency is a hot new trend in India. Every Indian wants to know about Bitcoin, Ethereum, Ripple and so on. If you’re an early adopter of cryptocurrencies and you want to invest in these digital assets, it can be challenging to separate legitimate investment opportunities from scams. Since India is relatively late at embracing crypto-currencies they will only continue to grow in popularity with time. This makes Indian cryptocurrency an exciting prospect for some investors who see great potential for growth going forward. Before we get into more detail I’d like to answer one simple question that most people are asking: what are cryptocurrencies anyway?