The crypto community in India experienced a watershed movement on Wednesday when the Supreme Court called off the RBI-imposed ban on cryptocurrencies. However, experts claim that the country’s new journey may not be as plain sailing as we think.
The Crypto community in India leaped with joy on Wednesday when the cryptocurrencies finally won a long-standing battle against the Reserve Bank of India (RBI). The interest peaked overnight and several Bitcoin exchanges, which halted their operations when RBI restricted banks and financial institutions from dealing with crypto-related businesses two years back, reinstated their services.
At the same time, banks such as Karnataka Bank, IDBI, and Karur Vyasa Bank, took the opportunity to integrate cryptocurrency payment methods following the landmark verdict. However, top industry leaders claim that bringing a lawful cryptocurrency market to life may not be as simple and that the journey is full of obstacles.
Rocky roads ahead for crypto community in India
The first and foremost practical challenge is India’s complex payment networks. Following the restrictions enforced by the RBI in April 2018, many exchanges had to turn to peer-to-peer payment networks to stay afloat. Today, with no official circular from the RBI yet, these exchanges are unable to offer online payment options to their customers.
Sathvik Viswanath, Unocoin founder, a crypto assets trading platform with a user base of over one million, says that the platform is receiving thousands of queries each day for enabling payments through NEFT or UPI. There is a massive spike in interest. However, we are unable to offer a workable solution at this moment, he explained.
As of today, Bitcoin exchanges in India have as many as eighty different cryptocurrencies for trading. But their very nature is quite complicated. While some fall under the securities category, others are called assets, tokens, or commodity derivatives.
According to an RBI official, the ambiguous nature of cryptocurrencies makes it challenging for the regulator to determine whether they fall under the jurisdiction of the RBI or the SEBI. Besides, different telecom companies promoting their own tokens for closed-network payments may further call for the involvement of the Telecom Regulatory Authority of India.
Nischal Shetty, who is the CEO of India’s largest cryptocurrency exchange WazirX, says that self-governance and vigilance will be extremely critical at this moment. Cryptocurrency scams in India have known to leave a bitter and long-lasting mark on the customer base and regulatory authorities. One wrong move and everything achieved so far could go waste, he said.
Rigorous Know-Your-Customer (KYC) and Anti-money Laundering (AML) checks are essential to ensure that there are no bad players in the industry who could end it all for the entire crypto community in India, Shetty asserted.
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