India’s central bank has virtually pulled the plug on the country’s cryptocurrency ecosystem by forbidding banks from having any business relationships with exchanges.
The Reserve Bank of India’s (RBI) April order instructed all Indian banks to terminate their businesses with cryptocurrency exchanges by the first week of July, a process that is currently in full swing. This means customers won’t be able to buy or sell digital currencies in exchange for cash on these platforms, which has resulted in trading volumes plummeting. From a peak of 15,000 units per day around the end of 2017, cryptocurrency trading in India has declined to less than 1,000 units currently, according to industry members.
On April 07, just two days after the central bank’s diktat, a new local exchange, CoinDCX, commenced operations, allowing customers to track even their international trades in Indian currency.
Later this year, Singapore-based Alluma is all set to launch its operations in India, with an emphasis on stringent background checks. Also, Ahmedabad- based CoinRecoil, a new Indian exchange, is looking to set up shop over the next few months.
“Whenever a new technology is introduced in the market then it faces criticism and steps are taken to stop its growth; the same thing is happening with virtual currencies,” said Kunal Barchha, director at Kali Digital Eco-Systems, which will launch CoinRecoil.
“Despite the challenges in India due to the regulatory environment, there is a significant potential for growth due to the large number of people and their purchasing power, and so we think it’s a good market,” he added.
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