An Indian crypto ban would have grave implications for the longer term of the nation’s economy, and would end in currency devaluation “of the worst form,” says blockchain entrepreneur and HashCash CEO Raj Chowdry.
Chowdry, also the director of the U.S.-based PayBito crypto exchange, outlined that India’s rejection of Bitcoin [BTC] along with other crypto-assets would be the equivalent of rejecting the U.S. dollar. Without regulating and eventually adopting cryptocurrency as a reserve currency, Chowdry believes India’s economy would suffer within the future.
“Maintaining Cryptocurrency reserves are as important as maintaining dollar reserves. By banning crypto, India will find itself with rock bottom reserve of the foremost important currency the world has ever seen. This is likely to eventually cause a currency devaluation of the worst form,” he explained.
The fate of cryptocurrencies in India looked ominous after an anonymous official leaked information regarding an upcoming ban to Bloomberg in February. Crypto holders were expected to tend a three to six-month window to transfer their funds back to fiat.
Moreover, recent noises beginning of the Indian Finance Ministry suggested things weren’t quite so clear-cut. Minister of finance Nirmala Sitharaman said reports of a blanket ban on cryptocurrencies had been overstated, and discussions were ongoing with regulators inside the Reserve Bank of India. Sitharaman added that any upcoming regulations wouldn’t be as severe as previously depicted.
Chowdry welcomes regulations and taxation of crypto assets if it means related business and enterprise can flourish within the country. The choice is to deprive Indian startups who have already gained a worldwide foothold of the chance to grow, Chowdry said.
“What India needs is acceptance of crypto with the imposition of taxation and regulations, which will earn revenue and benefit a large number of investors and Indian startup companies who have gone global within a brief period, instead of depriving the people of their choice of investment by adopting a naive approach towards the crypto,” he said.
Amid the rear and forth, the Reserve Bank of India continues to barge toward the issuance of a CBDC. Like all sovereign states, India’s apparent determination to launch a blockchain-based digital rupee suggests its issues with cryptocurrency aren’t associated with the underlying technology, but only who gets to regulate it.
Chowdry believes a measured approach is often taken to differentiate between blockchain as a technology and cryptocurrency as an asset class.
“These are two distinct and diverse threads which will be accepted independent of every other. While blockchain can be associated with more of a technology, cryptocurrency is an asset class. It shouldn’t be difficult to implement the 2 in their respective domains,” he explained.
Despite what many fear to be a regulatory ticking time bomb in India, global cryptocurrency exchange Coinbase recently announced that it might move a number of its IT services to India, as the firm edges closer to its upcoming IPO.