- The crypto industry seemingly won the battle against the country's central bank after the Supreme Court proclaimed the bank's crypto ban unreasonable.
- However, a bill from 2019 still threatens to severely limit the crypto industry and make it difficult, if not impossible, for businesses to operate in the country.
- In addition, the RBI is not dropping out from the conflict either, as it continues working on an appeal.
India’s crypto space recently won an important victory on March 4th, when the central bank’s ban on working with crypto businesses was revoked, but a pending bill may still prevent digital currencies from flourishing within the country. The parliament has yet to rule on a crypto bill from 2019, known as the “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill.”
If the bill is passed, it will bring unique regulations for cryptos commodity-backed tokens, as well as utility tokens. As a result, crypto and blockchain businesses would have to navigate a completely new and very complex exclusionary legislative apparatus.
Crypto industry continues to struggle in India
As mentioned, after the court ruled that the Reserve Bank of India’s ban was ‘disproportionate and unconstitutional,’ many thought that the crypto industry will finally be able to develop in India at full speed. In fact, multiple exchanges had resumed fiat deposit services less than 24 hours after the ruling. HashCash consultants even announced that they would invest $10 million into the country’s crypto industry in 2020.
However, the danger that the bill from 2019 is posing quickly became apparent, and a new threat to the industry. Not to mention that the RBI is already working on submitting an appeal regarding the Supreme Court’s ruling. Some sources claim that the bank is still highly concerned about the crypto industry’s potential to put the country’s traditional banking system at risk.
The Internet and Mobile Association of India’s Blockchain and Cryptocurrency Committee member, Sohail Merchant, recently stated that the blockchain industry stakeholders’ main objective is to create a dialogue with the country’s policymakers. This has proven to be a difficult task due to a lot of hostility from the lawmakers, but the dialogue is the only way to create a comprehensive framework for the crypto industry in the country.
Another thing to note is that the RBI ban has been in place since 2018, which has caused a lot of Indian crypto users to start using dark web platforms. A recent study had revealed that around 26% of 23,277 respondents have been using the dark web’s technologies, all between the ages of 16 and 65. According to the study, that is more than twice the global average, which sits at only 12%.