Text | Edited by Li Zheweng | Source by Bi Tongtong | PANews
The Indian exchange Koinex, which failed to survive the regulatory winter, collapsed in the sweltering summer of June last year, and the Supreme Court’s “spring thunder” trial brought several times the trading volume to the surviving exchanges overnight. increase.
On March 4 local time, three judges of the Supreme Court of India jointly ruled that a two-year resolution by the Reserve Bank of India (RBI) was unconstitutional.
In 2018, RBI issued a circular to Indian banks and financial institutions, prohibiting them from providing any services to virtual currencies, cutting off the channel between the local encryption world and the fiat currency world. The ruling of the Supreme Court of India means that local cryptocurrency exchanges and traders in India can re-open the cryptocurrency/fiat currency channel smoothly.
Bloomberg quoted Vailbhav Kakkar, a partner at L&L Law Firm, as saying, “With this ruling of the Supreme Court, the regulation of cryptocurrency and financial technology may become more mature and balanced.”
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"The world" has been banned for a long time
The circular of the Central Bank of India in April 2018 was undoubtedly a shock to the local trading platform. The bridge of legal currency was lost, the trading volume of local cryptocurrency dropped sharply, and many exchanges were closed.
In June 2019, one of the local exchange giants, Koinex, announced that it would shut down operations due to lack of bank support and regulatory uncertainty.
“Operating a digital currency exchange in India has become extremely difficult over the past 14 months due to the cut off of banking channels,” Koinex co-founder Rahul Raj wrote on Medium at the time.
Koinex began to provide digital asset trading services on August 25, 2017. Four months later, it became India's largest and most popular digital asset exchange, with a trading volume of 265 million US dollars, and also became "India's fastest growing startup company". With the Indian central bank's ban, the growth of Koinex has stagnated.
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Monthly trading volume of Koinex from August 2018 to June 2019 | Source: The Block
Prior to Koniex, there were also cryptocurrency exchanges such as Coindelta, Coinome, Zebpay (but the exchange has restarted operations in India since March 2) due to the same predicament.
Inconvenient trading channels and uncertainty in the regulatory environment have also led to a considerable premium for local cryptocurrencies in India.
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The enthusiasm of the Indian community is high, and the 24-hour transaction volume has increased by 6 times
Although there are still considerable regulatory uncertainties, the ruling of the Supreme Court still greatly boosted the confidence of the local encryption industry.
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Wazirx trading volume in the past 24 hours (as of 13:20 on March 5, Beijing time) | Source: Coingecko
At the time of writing, the fiat currency trading volume on WazirX exchange accounts for only 0.1% of the overall trading volume. The transaction volume of Zebpay, another major exchange, also experienced a surge of more than 2 times in the past 24 hours. As of 13:20 on March 5th, Beijing time, it recorded a transaction volume of about 130,000 US dollars.
transformation"transformation"The catalyst for the integration of fiat currency deposits and withdrawals is the first priority of the exchange. Now, Indian citizens can once again invest in digital assets.
OKEx, which entered the Indian market at the beginning of the year, also expressed its views on the changes in the Indian market. Xu Kun, chief strategy officer of OKEx, said that the Indian market has a huge Internet demographic dividend, with nearly 600 million Internet users, and the Indian rupee is seriously inflated, and the public’s demand for cryptocurrencies with both payment and value storage functions has always been strong. Previously, due to policy reasons, on-site transactions were restricted, but the popularity of off-site Bitcoin purchases has always been high, with daily trading volumes in the millions of dollars. This is a market worth expanding.
WazirX CEO Nischal Shetty told the media that this judgment will open the door to large-scale use of encryption technology in India, which proves that India can innovate and the entire country can participate in the blockchain revolution.
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The court handled it cautiously, and the government's attitude has not yet completely turned
The arrival of the ruling was full of twists and turns, and the results that finally cheered up the encryption industry had nothing to do with the cautious attitude of the court.
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Indian local media Crypto Kanoon stated that the Supreme Court of India attaches great importance to the case | Source: Twitter@cryptokanoon
According to Crypto Kanoon, a local blockchain media in India, the court stated that the postponement of the hearing several times is due to consideration that cryptocurrency-related matters may occupy the court’s agenda for a whole week. In other words, the Supreme Court of India actually took this case very seriously and did not choose to ignore it or directly favor RBI.
In its ruling, the court stated that "RBI at least needs to show that financial institutions under its supervision have suffered (of cryptocurrencies) damage, but have not".
Responding to the Supreme Court's decision, the country's Finance Minister Nirmala said the government will study the decision to decide on the next steps.
In addition to the central bank, the federal government of India has even imposed stricter regulatory attitudes on the local encryption industry. According to India's "Economic Times", the federal government has been preparing a draft since April 2019, intending to ban any cryptocurrency and related industries across India. Once the draft becomes law, mining, holding coins, buying and selling coins (whether directly or indirectly) will become illegal activities in India. It even proposed that "the use of cryptocurrency can be sentenced to up to 10 years in prison."
Fortunately, this draft was not passed in last winter's parliament. This gives the crypto community some breathing room. But at the same time, we need to be vigilant that although the federal government has been silent on the bill after the winter meeting, this does not mean that it has no possibility of being put on the agenda again.
Anirudh Rastogi, founder of law firm Ikigai, told the New York Times that he remains terrified that the government might pass the bill. Obviously, the final direction of this draft will be one of the biggest variables in the direction of the Indian cryptocurrency market.
The lifting of the ban on fiat currency deposits and withdrawals by the Indian Supreme Court certainly fills the market with a lot of optimism, but what needs to be seen at the same time is that whether it is the growth of transactions settled in local fiat currencies in India or the price changes of Bitcoin, it shows that Global investors have yet to "buy in" India's policy changes.
In the future, whether it will bring billions of dollars into the cryptocurrency market, and the global market still has an attitude to be seen about how the Indian authorities will regulate the cryptocurrency market in the future.
