It all started in 2018 when RBI issued a circular instructing banks not to indulge in any virtual currency dealings. IAMAI challenged this decision in court, as a result of which Supreme Court ruled in their favour and boosted morale of blockchain community. While the new rule brought crypto trading back, Indian government continues to maintain a strong stance on the topic. As per a recent report, it is now making progress with a draft bill that proposes a complete ban on holding, mining, trading cryptocurrencies with heavy fines and jail terms for offenders. Many in the industry feel banning them is a backward move and will only impact legal users. Nevertheless, if that happens India is all set to loose on at least the following top 3 opportunities:
- Loss of jobs: Pulling out hands from this $250+ Billion industry doesn’t sound like a wise approach. Experts believe that crypto is poised to create cutting- edge applications that can contribute to good business and boost the overall IT industry of India. According to job search site Indeed, the share of U.S. job postings related to crypto, blockchain and bitcoin has grown by 90% in an year but India might end up loosing on this growing scale of job creation.
- Brain drain: Many of the stakeholders in India’s blockchain industry— which includes developers, service providers, and other cryptocurrency-related firms shifted to nations with more friendly jurisdictions like Singapore, Switzerland, Japan and Estonia. If the trend continues, India is expected to see a massive brain drain in the long run as skilled citizens move out of the country to seek opportunities elsewhere.
- Big blow to start-up ecosystem: A ban would kill innovation in the area and would discourage tech startups. This will handicap India further from participating in new use cases that cryptocurrencies and tokens can offer. Many foreign crypto exchanges banned from working in India, had expressed displeasure over the strict regulatory environment in the country as they are refrained from trading here.
Having said that, government’s concerns regarding the misuse of cryptocurrency are valid but to address them, we need regulations and not a blanket ban. Several optimists in the industry believe that they will be able to overturn Indian Government’s approach on this topic by making the community of supporters stronger while some others say that the whole issue is blown out of proportion. Apparently at this stage, only a note is moved for inter-ministerial consultations and it will take sometime to implement a ban, if at all!
This content was originally published for my TechTuesday’s initiative on LinkedIn.
