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Regulatory and banking challenges are putting pressure on cryptocurrency trading in the country, as evidenced by a drop in 90% of the volume on the bitcoin trading platforms. The Central Bank of India, its central bank, has not reduced the accounts of traders, but Indian banks have adopted a two-pronged approach that compromises trading activities, including the closing of accounts of Exchange of bitcoins and the limitation of cryptocurrency transactions.
Bitcoins exchange based in Delhi Coinsecure suffered some of the worst, with CEO Mohit Kalra telling Economic Times that trading platform volumes are staggered between BTC 300-400 every day at the end of the year. -40 today.
The writing was apparently on the wall, while the government’s income tax department at the end of 2017 was sweeping close to a dozen bitcoin scholarships , looking for customers who exchanged cryptocurrences. Tax officials have discovered and alerted about 100,000 residents who were responsible for high volume transactions, according to the Economic Times.
The intervention of the tax authorities was exacerbated by the action of public and private financial institutions that decided to freeze the accounts of bitcoin exchanges. Banks Include –
- State Bank of India
- HDFC Bank
- Kotak Mahindra Bank
- ICCI Bank
At the same time, customers face similar restrictions as banks have banned credit card, debit and prepaid transactions, including bitcoins and altcoins. The measures are more stringent than the measures taken in the United States, where a handful of big banks prohibit bitcoin transactions with credit cards.
But if the goal is to curb bitcoin trading, this decision from the banks and the tone of the regulators could backfire, as investors are turning instead to cash for bitcoin transactions . This would complicate the transaction tracking process to support client awareness and anti-money laundering protocols.
A race on Bitcoin exchanges?
Representatives of Blockchain and Cryptocurrency sector groups in India view the latest actions of banks as “overruns” without any instructions from regulators, saying, “Without any clear mandate from the RBI or other regulators asking us to close our accounts (exchange) while refusing to give in writing what the reason is just disruptive for our business. “
In the meantime, this has led to confusion and anxiety among investors. Bitcoin exchanges must handle an influx of user complaints on their trading platforms, while traders can not access funds for days or more. It is a function of the banks to freeze the accounts of these exchanges, which tied the hands of the latter for the issue of withdrawals.
In the meantime, both BTCXIndia and ETHEX India closed their operations until there was more regulatory clarity. Shaktikanta Das, an official with the Indian Ministry of Finance, does not believe that cryptocurrencies can be repressed and instead wants to issue a blanket ban, similar to the approach taken by China.
Image from Shutterstock.
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