India’s central bank RBI recently ordered all financial institutions to put an end to the crypto business by suspending the banking services for crypto community, which led to the panic selling of crypto assets on Indian exchanges.
Some of the exchanges like Koinex suffered as low as 50% decline in prices within couple of hours on the last day of deadline given by RBI. The whole Indian crypto community is highly disappointed by Govt’s unclear stance & RBI’s approach towards crypto sphere without any learning.
Effect of RBI’s action over traders and investors
No doubt, RBI’s awful decision shocked Indian investors & traders the worst it affected the newbies who failed to survive and sold whatever they had in huge loss. However, matured ones took advantage at the same time, doubling their portfolios and remain unaffected due to having knowledge of converting into cash by alternate means such as wire transfer, neteller, skrill etc. of which newbies are alien to, who might regret later.
Effect on National economy
Apart from investors and traders, government too is going to loose millions which it could have added to its fortune by imposing proper guidelines and regulating the cryptos. Yes, I’m talking about taxation part. RBI’s decision has directly hampered the tax collection.
In last fiscal year govt. collected handful amount of taxes due to sharp spike in crypto market by sending notices to HNI’s. CNN, a news agency reported the movement of $20 Mn in US crypto market from India.
Shubhas Chandra Garg, the current Economic Affairs Secretory of India recently in an interview clearly stated – traders can trade among themselves, even with cash. How is the government going to achieve a cashless economy? On one part government is taking huge steps discouraging the cash transactions by digital means and at the same time encouraging the crypto community to carry out cash transactions.
Certainly its above my par to digest what government is actually looking for. Cash business in crypto will not only hamper tax collection but will increase illicit transactions and innocent traders will be targeted.
Earlier banking channels were giving the records of all transactions of the traders so both the government & traders were at the comfort zone of filing and collecting taxes.
Impact on Professionalism
For many Indian traders who put their efforts learning about the market tactics, crypto is the only bread & butter. Now they are left with only two options, either quit the cryptosphere and hunt for the new job or make international clients, say their near and dear ones living in crypto friendly countries .
Impact on Business
Within just a year the crypto industry growth is notable and were making good money on which RBI later hit hard, almost all Indian exchanges lost their volumes along with liquidity, though they did their best to provide solutions like P2P exchanges and crypto-crypto trade option. Still, people are moving towards the international exchanges due to lack of volume and liquidity.
Last but not the least – Brain Drain
Is India really about to loose computing & tech minds? Yes, for sure! If one has the knowledge he must deserve a stage to prove himself, if he didn’t get he’ll hunt for it by breaking boundaries. Yes, I’m talking about migration towards crypto friendly countries.
The world has witnessed the majority of Indian scientists and techies but not within India.
Whats the reason behind this?
It is because government thinks much about politics rather than development of nation and its citizen, making decision without any proper knowledge .
I’m saying this because recently in an RTI, RBI clearly declared that they didn’t form any committee to learn about cryptos and the underlying technology.
Late adoption is the only barrier pulling India’s leg to be the superpower.
Author Durgesh Pandey hails from Allahabad. Durgesh had to start earning for his family just after finishing school. He made a fortune in crypto, lives in Mumbai, and is one of the HNI who received a notice from the Income Tax Department. Like most crypto traders, even Durgesh has been scammed in ponzi crypto schemes and is now helping others to not make the same mistake.
You can connect with Durgesh on Twitter: @Tigerkinggg
Disclaimer: The views expressed in the article are of the author only. CoinCrunch has slightly edited the article purely for continuity.
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