With billions of dollars lost on cryptocurrency exchanges around the world, India was comparatively unaffected owing to the government and the RBI’s cautious attitude.
The government employed taxes to reduce demand despite the Reserve Bank of India’s (RBIrefusal )’s recognition of cryptocurrencies and repeated cautions against dealing in them.
The end result is that Indian investors have largely escaped the effects of the cryptocurrency crash, which has reduced the market value of all cryptocurrencies to USD 1 trillion from USD 3 trillion in 2021 and forced the Bahamas-based cryptocurrency exchange FTX into bankruptcy due to a surge in customer withdrawals.
The FTX empire collapse, which destroyed Sam Bankman-entire Fried’s USD 16 billion fortune, one of history’s largest-ever destructions of wealth, has shattered faith in the already challenged business that was working to earn mainstream legitimacy. The two most popular cryptocurrencies, Bitcoin and Ether, have seen precipitous drops in value.
In India, the RBI has steadfastly opposed virtual money since the beginning, even though the government first considered legislating to control such instruments.
However, after much thought and debate, the administration decided that because virtual currencies are borderless and carry excessive dangers, a worldwide consensus is necessary.
The fact that cryptocurrencies were created intentionally to circumvent the regulated financial system, according to the RBI, should be sufficient justification for treating them with care.
According to industry estimates, just 3% of Indian investors are exposed to crypto assets.
India-focused bitcoin startups are not yet sounding the alarm despite the global financial crisis. The two biggest cryptocurrency exchanges in India, WazirX and ZebPay, are still active.
What heroes are there? To expose the BS, the Indian government, SEBI, RBI, etc. Imagine how many people would have lost money if Indian businesses like brokers had entered the crypto market. Even still, just 3% of Indians really possess cryptocurrency.
“Tailpiece: This could still be ongoing. Abid Hassan, CEO of Sensibull.com, India’s largest options platform, tweeted, “Please do not buy this dip.
Kamlesh Shah, head of the Association of National Exchanges Members of India (ANMI), believes that the government’s and RBI’s decision not to recognize cryptocurrencies at this time is reasonable.
According to Shah, India has not yet observed savings being effectively channeled into investments to support economic development.
In the Financial Stability Report, published in June, Reserve Bank Governor Shaktikanta Das referred to cryptocurrencies as an “obvious hazard,” claiming that anything that draws value purely on conjecture, without any underpinning, is only speculation cloaked in a clever moniker.
The government supports the concept of outlawing private digital money, and the RBI has been warning the public against such virtual currencies.
Nirmala Sitharaman, the minister of finance, reaffirmed the RBI’s position that cryptocurrencies should be banned but added that no law would be achievable without intensive international cooperation.
Sitharaman recently stated in a written response to Parliament that RBI believes cryptocurrencies should be banned.
