Despite the approval by the Supreme Court of India, the Indian banks are still juggling in dealing with crypto transactions. This article enlists all the possible reasons for the same, detailing how lockdown has proved to be beneficial for the crypto domain.
Table of Contents
- Reasons Indian Banks are Acting Slow
- Lockdown- A Silver Lining in Crypto Space
- Concluding Lines
The conversation surrounding the blockchain and cryptocurrency has exploded recently across the globe, and technology is all set to revolutionize the financial industries and business operations. But still, it lurks outside of the mainstream as many people believe that it is intangible and confusing.
According to an industry report published in June 2020, it was noted that India, a developing country, is set to increase its crypto market share this year significantly, and the key drivers were instability of the rupee, regulatory environment, and remittances. It was also announced that the Supreme Court has allowed dealing in cryptocurrency, suppressing an earlier ban imposed by the Reserve Bank of India.
Despite such a big announcement, not all Indian banks seem to comply with the Supreme Court’s ruling and are still reluctant to work with crypto firms.
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Reasons Indian Banks are Acting Slow
Despite the approval by the Supreme Court of India, the Indian banks are still juggling in dealing with crypto transactions due to the following reasons:
Rumors and Regulatory Uncertainties
From the past few years, the Indian crypto community is meeting numerous unexpected turns. Recently, the rumor was spread that the Indian Ministry of Finance intended to ban cryptocurrencies within the subcontinent legally, which brought fears to the crypto community.
Siddharth Sogani, the founder of Crebaco, expressed his views about the continuous uncertainties prevailing in the country. He stated that the Indian government released the draft bill on crypto, which was made by interns of the National Institute of Financial Policy and Planning, without consulting any industry or subject matter expert. He believes that there should be several aspects to take into consideration while making policies in India.
In his words, “A dedicated government body should be there which regulates this industry, without that it is impossible to regulate crypto in India.”
Although Indian banks are now free from dealing with cryptocurrency business after RBI’s approval but still, the real quantitative impact remains to be seen. It is also believed that if crypto transactions were allowed, they would completely eliminate the need of third party bankers.”
Sidharth Sogani explained that,
“Banks in India are unclear about how to treat Bitcoin transactions. They clearly don’t want to get their hands dirty when crypto regulations are not in place. Also, RBI has not removed or issued a new circular, which tells the banks to start working with crypto companies again.”
Lack of Understanding
Despite cryptocurrency being a buzzword across the globe, a lack of understanding and knowledge in the crypto space persists. Skepticism is the other prominent factor that is proving to be a stepping stone in the crypto adoption.
Gaurav Dahake, the CEO of crypto exchange Bitbns, stated that although Bitbns has tried to address and figure out the doubts and concerns related to the crypto domain, confusion is unstoppable. He stated that,
“There’s confusion in terms of understanding the whole sector. Blockchain is good, cryptocurrency is bad seems to be the overall understanding, and traditional media has blown things out of proportion. Concerns revolve around money laundering, use in illicit activities. We, as exchanges have tried addressing this.”
Lockdown- A Silver Lining in Crypto Space
Cryptocurrency is a digital currency utilized for all kinds of exchanges and transactions for e-commerce purposes. It is rapidly gaining the public eye due to its peculiar features such as security, decentralization, faster settlement, and irreversible transactions.
As there is no longer a banking ban on crypto industries, various industries and startups are coming up in this direction. Amid COVID-19 pandemic, Indians are trading more. Ajeet Khurana, former head of the Blockchain and Cryptocurrency Committee of the IAMAI, believes that Daily crypto trading volume in India maybe $10-$30 million.”
Where private banks are still reluctant to work with crypto firms, many startups and companies are thinking about cryptocurrency mass adoption. Multiple retail investors and new players have entered into the cryptocurrency trading market during this phase. The major reason for such mass adoption is due to the dissemination of crypto education during this lockdown period. Traditional investors and crypto enthusiasts have signed up for online cryptocurrency training courses to understand the concept and make more lucrative investments.
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