There has been a calm following the chaos that has previously plagued the cryptocurrency world in the past weeks. Basically, after a volatile week of violent price fluctuations, the past 48 hours have seen the overall market capitalization stabilize at the $350 billion mark – up from its previous low of about $280 billion only a few days ago.
In India however, cryptocurrency exchanges are still facing uncertainty, considering the government’s hostile attitude towards the crypto market. In fact, reports indicate that there have been multiple warnings issued by authorities in Delhi concerning the use of digital currencies for illicit purposes.
The Indian government is seemingly not ready to let go of its hard stance on Bitcoin and cryptocurrencies, and continues to view these digital assets negatively. In addition, Indian banks have also taken up the mantle and moved to limit exchange operations prior to the adoption of any rules and policies on cryptocurrency regulation.
There Is Still no Official ban or Regulatory Policies by the Indian Government
The Reserve Bank of India is yet to issue any official statement on the ban or regulation of cryptocurrencies. However, leading banks in India have moved to clamp down crypto trading in the country by suspending cryptocurrency trading and exchange accounts. Specifically, Citibank, HDFC Bank, ICICI Bank and Kotak Mahindra Bank are among the biggest financial institutions to have imposed these restrictive measures on crypto-related transactions, while also restricting ordinary citizens from buying Bitcoin and cryptocurrencies with their debit, prepaid and credit cards.
For the most part, the move by the leading banks in India is similar to the move by America’s leading financial institutions including Citigroup, JP Morgan Chase and Bank of America. As with the Indian banks, the top financial institutions in the US moved to ban users from purchasing Bitcoin and cryptocurrencies with credit cards, citing a volatile crypto market and a drop in the value of cryptocurrencies.
Decreasing Trading Volumes
Without a doubt, however, the uncertainties that currently exist in the Indian crypto sphere have led to a significant decrease in the number of cryptocurrency transactions. For instance, a report from an Indian financial news outlet indicated that there has been a 90% decrease in trading volume in India among all cryptocurrency exchanges in the country. The tenfold decrease was confirmed by Mohit Kalra, the CEO of Coinsecure, who mentioned that “volumes are down from 300-400 Bitcoins” to about “30-40 Bitcoins” at the moment.
Indian Crypto Industry Accuses Banks
The move by the banks in India has come under heavy criticism from the Indian crypto industry as arepresentative accused leading banks in the country of taking a “disruptive stance” without a written reason, on the closure of Bitcoin and cryptocurrency-related accounts.
According to Ajeet Khurana( head of the Blockchain and cryptocurrency committee in India), the move by regulators to close down accounts without a reason in writing is disruptive. In addition, the CEO of Bixoxo also expressed concerns over the move by the leading banks, mentioning that “Customers are panicking and getting agitated, as they are not able to receive their money”
Two Crypto Exchanges Already Closed Down Due to the Pressure
In response to the hostile environment that currently exists in India, two Indian trading platforms, i.e. Ethexindia and BTCxindia, have already been forced out of the market. With about 35,000 customers, the two cryptocurrency exchange entities decided to halt trading as of March 5th. However, even with the hash stance on cryptocurrencies by the Indian government and the leading banks in the country, most Indian crypto enthusiasts are using international and overseas exchanges to buy cryptocurrencies as an alternative.
Image Credit: Deposit Photos
What do you think the fate of the clampdown by the Indian banks and government will be? Share your thoughts with us in the comments section.