Is India considering a ban on cryptocurrencies – again?
If so, this would be the second time around that particular maypole within just a couple of years.
Tech media are buzzing about the new introduction of a potential cryptocurrency ban brewing this month in Indian Parliament, because for so many nervous traders, it’s déjà vu all over again.
“Sources familiar with the matter told Bloomberg that the federal government is not keen to have cryptocurrencies functional within the country’s monetary system,” writes Bhushan Akolkar at Coingape. “This will be a major blow to crypto enthusiasts in India who have been left at the mercy and the whims of the regulators.”
The Indian Parliament already tried to ban cryptocurrencies in 2018, but the ban was reversed in March of this year, which led to an incredible 450% surge in cryptocurrency trading activity from March through May.
Analysts observed that many of the new trading portfolios created were heavy on Bitcoin, which is widely regarded as the front-running cryptocurrency worldwide.
Some have suggested that a generation of young professionals and engineers are putting their assets into Bitcoin and other cryptocurrencies, to float on a market that is largely untethering from equities over traditional market fears. If some of these newly minted investors are intrepid enough, they may be helping to fuel the outsized strike prices of Bitcoin option calls that posit BTC at $20,000 in 2020, or $500,000 in 2021.
If India succeeds in this new ban, it will again be one of the few countries that has enacted such as sweeping limitation on its citizens’ ability to participate in a global phenomenon. Is that a good thing?
In the past, the Indian government had hinted that it would allow investment in a new central bank digital coin to try to keep decentralized crypto players out of the national economy. However, not much information is forthcoming on that initiative. Keep an eye on what India is doing, because with a large population of tech-savvy traders, it could make a mark on BTC and other coin markets.