The government of India does not want to give in to the fight against cryptocurrencies and the Indian exchanges are not willing to surrender either. This relentless battle has the government making use of its power every day and the exchanges showing with arguments and activism that the government uses misconceptions to justify its actions.
India: A Ban is the Best Prevention
Recently, the Indian government organized a meeting between representatives from the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA). As a result, they passed a draft bill to ban the use of cryptocurrency under the Prevention of Money Laundering Act 2002 (PMLA).
The government argues that it is preferable to prohibit any type of operations with digital assets rather than work on a regulatory system specifically designed for these new technologies. With this, the authorities hope to protect investors from legal loopholes that could leave them in a state of helplessness against possible damages or irregularities.
Indian Exchanges Have Something to Say: You Can’t Ban Crypto
For many, the decentralized nature of cryptocurrencies makes it impossible to restrict or control. A founder of one of these exchanges explained to the Economic Times of India in a nutshell why the claims of the Indian government are illogical from his point of view.
“How can the government ban something it has no control over in the first place?”
According to this anonymous commentator, any kind of control will increase smuggling and parallel means of trade. Cryptocurrencies are already a social phenomenon with global reach, so any local or regional initiative will be unsuccessful:
“None of the advanced economies in the world barring China have banned crypto, as these countries have understood that banning the exchanges may result in proliferation of these currencies through illegitimate sources such as dark web and underground marketplaces,”.
“These coins are completely decentralized and currently no government has the technology to monitor them,” said Nischal Shetty, CEO of Mumbai-based crypto-exchange, WazirX.
Currently according to Sidhath Sogani, chief executive officer of CREBACO almost 7.3% of the total trading volume reported by Binance comes from India. Indian laws do not apply to this Malta-based exchange