India is once again in the grips of a potential crypto ban just a little after opening the doors to businesses dealing in crypto again. The country has had confusing regulatory stances over crypto for a few years now, but the on-again, off-again threats of bans may be worse than bans themselves.
Ambiguity and uncertainty around cryptocurrency regulation is far more damaging than outright rules and regulations, even if those are strict and uncompromising. Many cryptocurrency businesses are simply looking for the lines to be drawn in the sand that define the parameters.
There are some countries, like China, where the rules are outright and have a ban on crypto, but the clarity at least puts the businesses in a position where they know how they stand. Other countries, like the US, have a negative overview of crypto, but they still allow it, but with unclear regulations and rules.
By calling on companies in the crypto space to jump through hoops and to change the regulation on a recurring basis — or to even threaten it, leads these businesses to be in a state of limbo. These small businesses will rather evacuate the country than try to deal with the uncertainty .
India on a knife edge
After struggling for more than 2 years, the Indian Supreme court lifted the blanket ban placed by the Reserve Bank of India (RBI), enabling Indian crypto exchanges to provide bank withdrawals and deposits to traders.
Just months later, an official of the Indian government has now revealed that the authorities in the nation are actively working on new regulations to completely ban cryptocurrencies.
Reported by Indian media outlet Money Control, the law would be looking to ban cryptocurrency trading.
The report quoted an anonymous official who informed that consultations among the Ministry of Electronics and Information Technology, the Ministry of Law and Justice, and the Reserve Bank of India, had already begun regarding the framework of such a law.
“We are working on it. After inter-ministerial consultations, it (the note) would be presented to the cabinet for approval. Once Parliament resumes for the session, we are hoping to get it ratified,” the official said.
Need for clarity, for all
Robin Zhu, Huobi Global Group’s COO, explained that it is not only the businesses that need clarity, but also clarity is good for the individual users and the adoption of cryptocurrency
Zhu explained that, in addition to concerns about hacking and other nefarious uses, users are put off by the lack of defined regulations, infrastructure services, and user-friendly asset management systems. He said:
“Security has always been on the top of the list. Lack of defined regulations and infrastructure services means that it is hard for mass users to entrust their cryptocurrency with most institutions and cooperates in this industry without any doubt.”
Bitcoin is now well known across the world, but it is not entirely understood. There are a number of points that need to be addressed to further educate the population on Bitcoin, but the perceived concerns around hacking, and lack of regulation are another side to the coin that need to be sorted by governments and regulators.