India’s widespread crackdown on black market cash could lead to a ban on gold imports, if a text sent by the Indian Bullion & Jewellers Association (IBJA) is to be believed.
The trade body sent its 2500 members a text message informing them the government was hearing proposals on a possible gold ban.
“We hear from certain circles of this possibility (gold import ban and advancement of deposit date) though nothing official is out yet,” according to Surendra Mehta, national secretary, IBJA. “The association is supportive of the government’s fight against black money and has informed its members of the possibility of such action. We have asked our members to support the government wholeheartedly.”
The government is going after not only imports, but also information held by the nation’s jewellers. “Already, 600 jewellers have received notices from the tax department to disclose their sales till November 8. We are aware that certain members of the trade are importing gold only to sell the same against old notes at a hefty premium. So, if the government wants to stop this malpractice it might consider a ban on imports. Alternately, if it directs all jewellers to deposit or declare old notes by November 15, it would not necessarily consider banning imports.”
If gold becomes less available to the Indian public, this can mean only one thing for India Bitcoin demand. The price for bitcoins in rupees is already exploding. Like the move to ban gold imports, India Prime Minister Narendra Modi’s surprise move to ban the old 500 and 1000 rupees was meant to undermine black market stores of wealth.
Sandeep Goenka, the co-founder of Zebpay, an app-enabled bitcoin wallet provider held an AMA November 21. He shed some insight into the Bitcoin market amid a changing money landscape in India. Users asked the CEO about a large discrepancy between buying bitcoins in India compared to western countries.
“Since we do not import bitcoins, our supply is limited to Indians,” Mr. Goenka explained. “When price increases, in India there are a lot more buyers than sellers. To match the demand and supply on Zebpay, we have to keep increasing prices. This is common worldwide. Many times in China also, the prices are higher than global prices due to an increase in local demand.” Many of the users were unclear the company’s relationship to Bitcoin, and Mr. Goenka spent a large portion of the AMA explaining what bitcoin is. He explained that there is currently no trend for nation-states banning Bitcoin.
“Governments in most western countries have regulated and legalized bitcoins in the last 1 year,” he said. “So the trend is towards legalizing and not banning bitcoins. I believe RBI will follow the same trend.”
He says his Zebpay has contacted all government bodies to get clarity on import / export of bitcoins.
Or India could just do to Zebpay what the IRS did to Coinbase. Or India did to jewellers.
Meanwhile, it’s clear to see search queries for “buy bitcoin” in India are on the rise year-to-date:
Images from Shutterstock.
Last modified: June 10, 2020 10:53 AM UTC