Death sentence of Cryptocurrency in India and how it happened
Governments across the world have been at war with cryptocurrency for a while now. With the unprecedented increase in Bitcoin followed by a fall, Indians hooked on cryptocurrencies have seen it all in the last year.
In 2017, the price of a Bitcoin increased from around $900 at the beginning of the year to almost $20,000 in December. This fuelled a boom in trade and a rise in the number of investors in India.
The authorities soon made known their agitation with virtual currencies and cautioned investors. A few warning signals followed and then the RBI finally pulled the plug on cryptocurrency exchanges.
The Reserve Bank of India in its Monetary Policy restricted the Central Banks from dealing with or provides services to any individual or business entities dealing with or settling virtual currencies.
Here are steps on how India slowly but steadily drowned its cryptocurrency ecosystem.
• Driven by the price boom, in November 2017 customer registrations increased rapidly.
• In December 2017, the RBI issued another warning against these currencies after the first was issued in December 2013. The Ministry of Finance compares the virtual currencies with the Ponzi schemes.
• In January 2018, the tax department begins sending tax notices to investors. Banks suspend withdrawal and deposit facilities of some exchanges.
• In February 2018, Finance Minister Arun Jaitley, in his annual budget speech said the government will go all out to eliminate their use in financing illegitimate activities. They won’t be included as part of the payments system.
• In April 2018, the RBI orders lenders to close all banking relationships with virtual currency exchanges and investors within three months. Frustrated cryptocurrency exchanges drag the central bank to court.
• In May 2018, the Supreme Court clubs the multiple cryptocurrency cases against the RBI. The court requested that the Indian Attorney General, KK Venugopal, be present at the next hearing date, July 20.
• In June 2018, Exchanges sent representatives to the RBI pleading that they should be regulated and that the ban should be lifted.
• In July 2018, some petitioners seek a stay order from the Supreme Court on the ban at least till the next date of the hearing but their request was denied.
Meanwhile, Cryptocurrency exchanges in India have one by one announced the shutdown of their fiat deposits and withdrawals as banks start closing their accounts per RBI’s crypto banking ban.
The RBI Ban takes full effect from 6th July 2018, exchanges are trying to educate the central bank in hopes of easing the ban.
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