A ban on crypto currencies like the most renowned one called Bitcoin may result in wealth erosion for more than 1 crore Indian investors and traders. According to an estimation, a specific part of Indian population owns digital assets collectively worth over INR 10,000 crore. The ban won’t just affect the Crypto Entrepreneurs businesses, but also lead to an increased action on black markets as well. Even foreign firms would also achieve more gains.
A complete ban will force self-regulated exchanges to shut down, said Nischal Shetty, co-founder and CEO of WazirX, one of India’s largest cryptocurrency bourses. Shetty states, “It will also eliminate possible data avenues for the government and regulators around the crypto ecosystem. A ban would lead to increased liquidity for the black market and push people to transact in cash for buying and selling Bitcoin,”.
As per the investors and cyber law experts, the government should think of regulating and uplifting cryptocurrencies instead of complete ban. In the era of new digital generation, where technology keeps advancing day by day, authorities should instead promote the digital currency system to become one of the developing countries in terms of digital currency systems. However, Indian investors will not face any prosecution for prior actions if a ban is implemented. A single bitcoin had the value of $58,000 and its market capitalization was $1.1 trillion, which would make Bitcoin the sixth most valued stock in the Cryptocurrency companies.
According to Shetty, a ban is not a solution and that’s a primary reason the US,the UK and Singapore are working on a regulation.“There are about 340 crypto startups in India. A ban will erode wealth and also prevent India from participating in this innovation.”
While a ban may result in financial losses for investors and traders, they are not expected to be assumed on the wrong side of the law. “You cannot be prosecuted for a criminal provision under the new law for acts done before it came into effect,” SC advocate Nappinai said, adding that crypto was always a risk factor and only those with high-risk enthusiasm proceeded ahead.
Bitcoin, being a decentralised digital currency, has also been criticised as it can facilitate cross-border illegal trade. However, WazirX’s Shetty said that regulation will help eliminate bad agitators. SC advocate Nappinai added that cases involving crypto Ponzi schemes and hacking have been dealt with using existing laws.
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