A news article has been doing round amongst the Indian cryptocurrency circle, which states that the Indian Government plans on banning cryptocurrency trading in the country. Normally, such articles are ignored by the community, but what is interesting this time is it’s published on Bloomberg, which is one of the best business journals in the world.
Usually, Bloomberg’s articles are well-researched and true to the point, but this time the article on “Indian Government Banning Cryptocurrency” is factually incorrect and is a bad piece of journalism. In this article, we dissect the Bloomberg’s article on what is wrong with it, and we will also give compelling arguments on why cryptocurrency trading won’t be banned in India anytime soon.
The article by Bloomberg begins with the following passage,
“India plans to introduce a new law banning trade in cryptocurrencies, placing it out of step with other Asian economies which have chosen to regulate the fledgling market.
The bill is expected to be discussed shortly by the federal cabinet before it is sent to parliament, according to people familiar with the development who who asked not to be identified, citing rules on speaking with the media.”
Now one of the obvious similarities between this article and previous articles claiming Bitcoin is being banned in India is the lack of source. Every article claims they are in touch with a person “familiar” with this matter. The question everyone should be asking is, why isn’t the person mentioned? If the person can’t be named why isn’t a designation or work mentioned? For all we know, the person familiar with this matter could be a 15-year old kid.
The next paragraph on the Bloomberg article says that the Indian government will ban cryptocurrency trading but will allow blockchain technology (where have we heard this before?).
“The federal government will encourage blockchain, the technology underlying cryptocurrencies, but is not keen on cryptocurrency trading, according to two people. India’s finance ministry spokesman didn’t respond to call and a message seeking comments.”
And that’s it. No more information regarding the ban is given. In fact, the rest of the article continues with how cryptocurrency companies in India will be affected by a cryptocurrency ban. The article may very well be titled. “What happens if cryptocurrency trading in India is banned?”.
To give you an analogy, this article is like the “Batman vs Superman” movie. You go to the theatres thinking you will get a cool fight, instead, you get two dudes becoming friends because their mothers have the same name.
Yeah, that’s how bad the Bloomberg article is. And unfortunately, every major media just copied the Blomberg article without doing any research. The article by Bloomberg is nothing but a clickbait.
And that’s the problem with this industry, people will believe any rumor. Now there is a slight possibility that it might be banned, it’s not going to happen in the next 1-2 years, and we will tell you why.
First of all, let us clear something – cryptocurrency trading in India is legal currently and is not banned. Do not believe anyone that claims so, unless it is directed by government-issued circular. In fact, veteran leader Subramanian Swamy has himself said that a Blanket Ban on cryptocurrency is useless.
: If it is unstoppable then develop software to regulate it. Blannket Ban is useless
— Subramanian Swamy (@Swamy39) March 4, 2020
That being cleared, let us look into some of the reasons why there is no cryptocurrency ban on the government’s agenda currently.
1) It’s An Upcoming Technology
Believe it or not, but cryptocurrency and it’s underlying technology is the future of money and it’s here to stay. Countries such as the US are researching on benefits of cryptocurrency, while countries such as China are running trials of a nationwide cryptocurrency. The Indian government doesn’t want to lag behind. The fact is evident that only RBI banned cryptocurrency, not the government.
2) It Takes Years To Pass A Bill
Unless it’s a national security threat, a bill banning something in India takes years to pass. Cryptocurrency is very small in India currently. So small that there are less than 10 lakh people (1 million people) who have invested in cryptocurrency. Since India is a democracy, the process of banning cryptocurrency needs to first be presented in Parliament. After that, the bill needs to gain a majority vote. Frankly, the Indian government has better things to do than discuss banning cryptocurrencies.
3) Many People Will Lose Their Jobs
The blockchain industry currently employs more than 20K people in India with the number expected to reach 100K+ in the next 2-3 years. Due to the COVID-19 pandemic, many youths are unemployed. Any decision against this industry will have a ripple effect on the entire economy, a position which the government doesn’t want to find itself.
4) Banning Cryptocurrency Sets India Back
One reason for the rise of China in the late 20th century has been the adoption of new technologies. When the internet was first introduced to the world in the early 1990s, China quickly started laying out the groundwork for the Internet in the country. They did the same with Blockchain. While in both cases, India took a step back, allowed the technology to mature more before making a decision. This caused India to miss out on billions of dollars worth of opportunities. The current government realizes this mistake and is trying to avoid a repeat of past mistakes. So rest assured, cryptocurrency won’t be banned overnight.
In an unlikely scenario, if cryptocurrency trading does get banned in India – P2P exchanges such as OKEx P2P and closed-loop exchanges such as NeoFi will continue to operate and allow cryptocurrency trading. That is the beauty of cryptocurrency, after all, no one can control it.
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