It is quite evident by now that the government of India doesn’t like bitcoin in particular and cryptocurrencies in general. Regulators in the country have officially clamped down on bitcoin and other cryptocurrencies, with a draft legislation making it clear that holding, buying or selling cryptocurrencies in the country is a crime.
The sad news is that the Indian government and the regulators seem to be succeeding in their mission against bitcoin. This is evident from the fact that LocalBitcoins volumes in India have been steadily declining over the past few weeks.
The Indian government’s primitive understanding of bitcoin and cryptocurrencies has given birth to some extremely hostile measures.
Just over a month ago, it came to light that those dealing in cryptocurrencies could spend up to 10 years in prison. This added to the list of draconian laws the establishment has been designing to kill bitcoin in the country.
Turn the clock back to April last year and we come across another move that was made with an intention of killing India’s crypto ecosystem. The country’s central bank ordered financial institutions regulated by it to stop serving cryptocurrency exchanges, as well as bar their customers from buying the likes of bitcoin or other virtual currencies. The central bank had said in a statement:
“Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time.”
This was the death knell for crypto exchanges in India that started biting the dust once the banking system stopped supporting them. As a result, bitcoin enthusiasts in India turned their attention toward peer-to-peer platforms such as LocalBitcoins to buy cryptocurrency.
As evident from the chart at the beginning of the article, LocalBitcoins volumes in India rose steadily from the second half of 2018 up until April this year. But even though the price of bitcoin started soaring, Indians stopped buying bitcoin despite the massive price targets painted on the cryptocurrency.
LocalBitcoins data suggests that bitcoin volumes in India have dropped for six weeks on the trot since mid-June, just after the prison sentence regulation started doing the rounds.
As India is close to outlawing bitcoin and other cryptocurrencies, none would want to risk the wrath of the government and go to jail for a good number of years. So don’t be surprised to see bitcoin volumes in India coming down on peer-to-peer platforms as well.
With all being said, bitcoin in India is on life-support right now and the day might not be far off when the government ensures that no one in the country is holding decentralized digital currencies.
Last modified: May 20, 2020 2:13 PM