The top court of India decided to uphold the prohibition on banks and similar financial institutions of the country concerning deals with cryptocurrencies. The prohibition was issued by the Reserve Bank of India (RBI) previously this year. According to that, the financial institutions were to halt all actions connected with cryptocurrencies during the three-month period, starting from April 6th.
The position of the RBI representatives was strict: Bitcoin and other cryptos are not currencies according to the state law which defines coins as objects made of metal or having other physical forms. Moreover, they must also be marked by the government. The central bank’s leitmotif on prohibition stays the same — to cut off an avenue for crimes using cryptocurrencies, while the finance ministry in on its way to create a final ruling.
However, such news might put India with its third largest economy in Asia way behind other countries, which are more loyal to cryptosphere — such as South Korea or Malta, which is pushing to the forefront of the regulation of cryptocurrencies. Bitnewstoday’s reporters received several comments from experts on this situation.
Q.: What possibilities did India lose due to this decision? And which country would win due to that?
Oliver La Rosa, Deputy Head Malta at IACA, Chairman at IDACB Malta and COO Globiance: “That Asia’s third-largest Crypto economy is shut out from trading means that Indian ICOs will search for other countries to set up their operations in. Malta is pushing to the forefront of the regulation of cryptocurrency. All big exchanges move now to Malta to get licensed. Most countries just declared so far that cryptocurrencies are not illegal; however that doesn't give you any legal certainty to operate your company, and you can not be sure that your operations will be shut down later. Malta worked out a full legal framework with authority (MDIA) regulating the crypto industry which will ensure that you can run your business with legal certainty and don't get bad surprises later. On top of that Malta offers lowest taxes in whole Europe (5% effectively) as well as 2nd lowest employment side costs (only 10% on top of gross salaries). Both utility and security token ICOs can be done here. Also, banking solutions are available. We expect more and more ICOs to come to Malta to profit from these benefits.”
Nikhil Patel, CEO at Cryptex Live: “This is obviously a big step behind for India, which will hinder the adoption of more and better financial instruments than the current options in the Indian market. Solutions like P2P exchanges like LocalBitcoins.com will prevail and won’t completely stop the adoption of crypto. Advantages will come to those who are a step ahead like Malta and other pro-cryptocurrency countries.”
Kohei Kurihara, President of Government Blockchain Association Tokyo Chapter: “Japan takes a similar stance to put regulatory overview as security driven assessment. This is an advantage for traditional finance industries from the perspective of the investor and consumer protection, but against the freedom of trade. Still, this is a current stance, and no official updates to be determined as security stance, that’s my personal opinion. Small countries, Malta, Singapore are attractive and flexible with new industry.”
It seems that, in the end, most Indian companies from crypto industry will look for an alternative as they did during the ICO ban carried out in China.