Ever since The Cryptocurrency and Regulation of Official Digital Currency Bill,2021 made its thanks to the list of Lok Sabha agendas on 29 January 2021, this discussion on loss and gain with the cryptocurrency ban is doing the rounds.
However, the bill remained within the list of agendas alone and was never discussed within the budget session 2021. Citing the delay within the introduction, consideration, and spending (as mentioned under the ‘Motion proposed to be moved” column of the Lok Sabha Bulletin – II), and therefore the shift within the opinion of involved ministers over time, crypto stakeholders are optimistic a few possible regulations instead of a ban on cryptocurrency trading. While speaking on the matter, the incumbent minister of finance, Nirmala Sitharaman has signaled that the govt is thinking of a “calibrated approach” and leaving a window open for experiments in cryptocurrency and blockchain technology.
The first real intent of governments on crypto trading regulations are often deciphered from the 26 March move of the Ministry of Corporate Affairs (MCA) asking exchanges or trading companies within the country to mandatorily disclose any dealings in cryptocurrency or virtual currency in their balance sheets. It’s to be effective from April 1, 2021. The MCA is exercising its power supported the newest amendments to the Schedule III of the businesses Act, 2013. the subsequent disclosure is required: the quantity of holding and therefore the Details of deposits or advances from a person for the aim of trading or investing in cryptocurrency or virtual currency, The Blockchain and Crypto Assets Council (BACC) of the web and Mobile Association of India (IAMAI) has welcomed the government’s move.
Will India lose or gain if a crypto ban takes place? Here may be a detailed analysis.
Loss
Let’s see who are often the large losers
Investors
Today India has over 75 lakh cryptocurrency investors who’ve collectively poured in over Rs 10,000 crore. The outright ban will disappoint the investors. Ajeet Khurana, Former CEO, Zebpay and Angel Investor while lecture Quint, says that more people have started investing in bitcoin than those leaving it in recent times. the amount has increased significantly despite the government’s lackadaisical approach. If the govt confiscates their money too, which is one among the rarest possibilities, it'll affect their financial health. Citing the growing patronage of cryptocurrency trading, it’s difficult for the govt to place a check on its trading.
Exchanges
Today, India is home to around 20 crypto exchanges and that they allow hundreds and thousands of traders to trade spot, derivatives, and options markets. With the growing worth of the trading (the below illustration is of PCEX Member), you'll imagine the quantity of injury incurred to the crypto ecosystem with the blanket ban on its trading.
These exchanges are attracting retail also as institutional investors. So, the cryptocurrency ban will, needless to mention, affect the business of related exchanges and other people employed there.
Governments
Lack of clarity on crypto regulation or an entire ban will stop the income sources for the govt exchequer through direct (corporate tax, GST, and income tax) and indirect taxes. The ambit of indirect taxation has no limit. Citing India’s third rank on the list of top 10 global economies by GDP, it’s a critical time for the govt to adopt consumer-friendly laws and regulations to maximize the potential. A positive take from the govt will boost the arrogance of investors and crypto exchanges alike.
Gain
Certainly, losers are many, but when it involves gain makers, there are only two possible segments.
Banks
The drop by bank’s interest rates has shifted the main target of investors to alternative investment, and crypto trading due to its quick and high returns has captured their attention. However, with the government’s decision to ban, those conventional investors will once more move towards banks. this may cause a spur within the banking assets.
Insurance firms
Insurance firms haven't been the selection of investors, particularly, those that have an interest during a higher return on investment, but they're likely to form small gains if the cryptocurrency ban becomes a reality.
Stocks/shares market
With the ban on crypto trading, traditional equity instruments like stocks and shares will once more become the first attention of investors. this may help corporates to boost more funds from the market and reach their objectives. the event will boost the earnings of asset management brokerage firms or individual brokers, who earn from the commission.
Loss Vs Gain
It’s no brainer that each business endeavor needs investors, and it’s clear that the interest of the investors goes with the continuance of cryptocurrency, not in its ban. The winners from the ban as discussed above like banks, insurance firms, and stocks or shares markets also believe the investors. Investment isn't a destination but it’s a journey. When investors are proud of their return on investment, they invest further and don't hesitate in taking risks to realize more. So, the economy as an entire will only suffer if a crypto ban happens, and maybe, that’s the catch that creates the regulators and governments think more instead of taking a hasty step in putting a ban over its trading.
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