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#IndiaBansBitcoin – India’s Love-Hate Relationship with Cryptocurrency

Let’s start with the Top Headlines in India this month.

Yes, that’s Indian Media for you. They conveniently ignore the fact that Bitcoin and cryptocurrencies are NOT banned at all in India. Unfortunately, negativity sells and this stuff has caught on like fire.

But the truth is, there’s a lot more to this than meets the eye. Before we dig deeper, time for a friendly public disclosure.

Instances of theft, bribery, violence and a multimillion dollar scam lies ahead.

To understand the present and future, it’s important to understand the past. Here’s a brief overview of events to get you up to speed.

  1. November 08, 2016 the Indian government basically rendered the largest currency denominations ( Rs. 500 and  Rs. 1000 banknotes ) completely worthless. A deadline was set, and the public was instructed to exchange these notes in the bank.

    Why did I make you go through something that happened almost 2 years ago? Relax…It’ll make sense, read on 🙂
  2. In April 2018, Reserve Bank of India (RBI) gave a window of three months to banks to cut ties with firms or individuals dealing in cryptocurrencies. Citing that “if crypto grows beyond a size, it can endanger financial stability as well”.
  3. Millions of investors in India were unhappy with the verdict. #RBICantStopMe and #IndiaBansBitcoin trended on Indian twitter and multiple petitions were filed
  4. However, India’s Supreme Court ignored them and the 3 month window ended on July 05, 2018.
  5. India’s Largest exchanges shut cash deposits and withdrawals.

In theory it seemed simple to RBI and the political bigwigs. Kill the ties with banks, and cryptocurrencies would die a slow and painful death. But crypto proved to be much more than that.

The opposite happened. Interest did not die, just the medium of investing changed.

  1. Leading Indian exchanges shifted to crypto-to-crypto and P2P transactions.
  2. Transactions didn’t stop, instead, they went in the unregulated and grey areas of India’s financial relm.
  3. Several WhatsApp and Telegram groups sprouted overnight to facilitate these peer-to-peer trades and the activity in these groups increased manifold! In short, a recipe for theft, loot and scam.

And just as I expected, a multimillion dollar bitcoin scam was exposed in the first week of June 2018.

The scam transpired during India’s Demonetisation period (see, told ya it’ll all make sense eventually). During demonetisation, people with lots of cash, instead of depositing in the bank and revealing their black money, converted it into crypto using questionable operators. Estimated to range over Rs. 5000 CRORES ($727 Million), this is a scam fit for a thriller movie. An extortionist blamed another extortionist of stealing his bitcoin, after which the entire racket was exposed. The culprits involved are being linked to India’s leading political party and prominent celebrities.

So yes, it’s all a big complex mess.

But here’s the thing, every day while I tweet and interact with thousands of Indians through my twitter handle @desicryptohodlr,  I witness, first hand, the rising interest in blockchain and cryptocurrencies. People are not stopping. The talk of the town isn’t – oh my god what are we going to do!!! What everyone is talking about is the next big ICO, the next moon coin and yes, senor lupe.

As an outsider to the Indian cryptosphere, you might be reading about this for the first time. #IndiaBansBitcoin didn’t trend as much as #ChinaBansBitcoin. Much of crypto-twitter and other cryptocurrency outlets have been completely oblivious to all these events.

And I say, it’s for the better. Lesser the global FUD the better. In a few months, this would become the new norm and India, like the world will move ahead in search for the next breakthrough in blockchain tech and the world of cryptocurrency!

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