- Things go from bad to worse for India’s crypto community.
- After Zebpay closed shop, other exchanges are looking for clever ways to survive.
- Case challenging RBI crypto ban yet to be concluded.
From the glorious high following last year’s cryptocurrency boom when Bitcoin’s value reached close to $20,000 and the price correction early this year, the Indian cryptocurrency enthusiasts have seen it all. However, things went from bad to worse for those hooked to digital currencies when RBI clamped down on the completely.
RBI Chokes the Indian Cryptosphere
The year 2017 was a glorious year for the world’s leading cryptocurrency, the price of Bitcoin rose from $900 to near $20,000 by the end of the year. This heralded a boom in its trade and the numbers of cryptocurrency investors in India swelled and this must have appeared in the radar of the government and the country’s central bank the Reserve Bank of India (RBI).
Prime Minister Narendra Modi’s government soon made it clear it wasn’t at ease with cryptocurrencies and sent a word of caution to potential investors. After a few warning signals and conflicting statements, the RBI eventually pulled the plug on cryptocurrency exchanges.
In what could be called a near-complete crackdown on all cryptocurrencies in India, In the Reserve Bank of India (RBI) gave a three-month window to banks the RBI regulates and instructed them shut down all accounts for investors and individuals dealing with digital currencies by July 6, 2018. With bank accounts frozen and rupee-Bitcoin trade almost coming to a grinding halt, things are not looking so good in cryptoshpere as this has brought the overall trading volumes to their lowest levels.
Zebpay Bids Adieu
Last month, India’s cryptocurrency market experienced the biggest blow yet, when the oldest and biggest cryptocurrency exchange Zebpay announced on September 27, 2018, it was closing business in India (the exchange has since moved to Malta and Singapore).
The other exchanges and crypto investors are waiting with bated breath for the hearing of a petition at the country’s Supreme Court that was filed by some of them and the Internet and Mobile Association of India (IAMAI), challenging RBI’s circular on April 6, 2018 prohibiting crypto-rupee trade, but which has been postponed severally.
There has been a rise in peer-to-peer cryptocurrency transactions and innovations by a few exchanges that are looking for a way to survive. The CEO and co-founder of Unocoin Sathvik Vishwanath said their trade volumes are down to less than 10 percent of their volumes three months ago, Unocoin recently launched the first Bitcoin ATM in India. The CEO and co-founder of Koinex Rahul Raj said about their trade volumes:
“At the peak in December 2017, we did around $265 million in trading volume in a 24-hour period. Right now it is about $1-2 million in a day.”