On Tuesday, September 11, The Indian supreme court will hear all petitions against the crypto banking ban by the Reserve Bank of India(RBI). As the day creeps closer, Indian crypto – enthusiast, and investors are intrigued about the decision and its concurrent repercussion on Cryptocurrencies.
RBI issued a circular on April 6 that banned local banks from providing services to crypto businesses. A petition against the ban was launched and now crypto – enthusiasts wait for the court’s decision. Meanwhile, a number of crypto exchanges operating in the country developed methods to allow users to continue to deposit and withdraw Indian rupees. Among them are Wazirx, Instashift, and Coindcx exchanges which offer services based on the exchange-escrowed peer-to-peer (P2P) model. news.Bitcoin.com interviewed CEOs of above mentioned Indian exchanges to gauge their expectation, the trader sentiment, current and future’s trading volumes of their exchange.
Nischal Shetty, Wazirx’s CEO, shared:
“The SC hearing is not the end of the road but the beginning of the crypto journey in India…If the outcome is positive then it will definitely boost trading volumes. If the outcome is negative then I don’t think there would be much impact on the existing trading volumes.”
Rahul Chitale, CEO of Instashift, told the platform
“The ruling will surely have some bearing and the SC’s views will shape a lot of the regulatory thinking, but it’s unlikely to have an immediate tactical impact,” he adds “Crypto will continue to thrive regardless of the government view, like we have seen worldwide. Any ruling which forces the government to precipitate taking a view on this will only benefit crypto in India in the long run.”
CEO of Coindcx, Sumit Gupta, noted that in the evolving cryptocurrency scenario, a ban will not deter investment but will just shift the users to P2P trading platforms:
“All Indian exchanges and crypto traders are eyeing the SC ruling. Indian traders will eventually find ways to invest in cryptocurrencies via some innovative channels. A negative ruling will just shift users to P2P trading platforms,” he adds ” A positive ruling will boost crypto trade in the Indian market like we have seen in Q3 of 2017 and we will see lakhs of new users joining exchange platforms and volumes can shoot up even higher than it was before in the next bullish run.”
RBI Ban did not hinder Trading Volumes
While RBI’s precise intention was to discourage investors, Wazirx CEO reveals that his exchange platform has witnessed an increase in the trading volumes. He attributes the same to the increase in popularity of the exchange-escrowed P2P service. He said:
“Our trading volumes have been growing every week. We were pleasantly surprised and overwhelmed by the way users have acclimatized themselves to P2P.”
A similar growth has been observed by Instashift as well, Chitale describes”
“since the last set of RBI related developments in the past couple of months, we have continued to see strong 20-25% growth in trading volumes month on month over the last 2 quarters of our operation. There is a lot of trader money still parked on the sidelines, and we continue to see a lot of it return back to the market, even in spite of the current downturn in nearly all major coins.
However, CEO of Coindcx believes the rise is “due to its crypto-crypto nature,” additionaly he thinks the future of Cryptocurrencies in India will be impacted SC’s verdict as
“Most of the Indian crypto investors are either hodling or trading rarely and hence the decline in overall volumes across exchanges. We observed that many people are also waiting to hear the SC verdict before they invest as this is also going to move crypto prices in India.”
Sathvik Vishwanath, CEO of one of India’s largest crypto exchanges, Unocoin, is on the same page with Shetty on this
“The volumes have significantly come down as this [RBI’s ban] is not only restricting the new users joining the platform but it is also hurting the sentiments of the present users.”
The platform currently does not offer P2P trading.
What’s in store
While they obviously hope for a positive outcome, most of them have strategized for the other side as well. According to Chitale:
“Our users are mostly retail investors who are into it for the long run, and while trading volumes may fluctuate up or down…we don’t see investor demand diminishing in the shorter timeframe.”
Shetty sails in the same boat, he claims that Wazirx is prepared for both scenarios. If a stay order is granted on the RBI ban, “we’ll immediately resume bank deposits and withdrawals for all our users.” On the flip side, the platform “is already working great for all the users in India.” He elaborates:
“Crypto has now reached a stage where everyone has started taking it seriously in India and the majority of the young generation sees crypto as a way to invest their money…I’m banking on the SC releasing a directive asking the government to lay out regulations for crypto in India as that would enable every Indian to trade safely in crypto in the future.”
Sailing in the same boat, Chitale added:
“We are hopeful that the ruling will cause the government to prioritize its stand and clarity on a number of aspects of crypto,” such as regarding “taxation, classification, resolve any duality in state/center views, and so on. In short, this can only lead to clarity. Any clarity will lead to trader and investor confidence thus boosting the overall market.”
Similarly, Gupta confirmed that Coindcx is “already prepared for the worst and have backup plans no matter which way the ruling swings.” Nonetheless, he said:
“We are hopeful and believe that the government’s careful evaluation of the blockchain and cryptocurrency space will bring out a positive ruling that protects the interests of Indian crypto traders and investors. However I strongly feel that this space will eventually get regulated in India and we will see India as one of the global leaders in the blockchain space in the next 3-4 years.”
It seems not just the exchange platforms, RBI has also been preparing for any of the alternatives. From forming “https://kryptomoney.com/rbi-employs-special-unit-cryptocurrencies-blockchain-ai/” target=”_blank” rel=”noopener noreferrer”>a special unit to understand the digital assets better to sending off officials on “https://kryptomoney.com/india-sends-officials-us-japan-switzerland-study-cryptocurrency-icos/” target=”_blank” rel=”noopener noreferrer”>a trip to nations that allow Cryptocurrencies in order to comprehend their regulations regarding it and most notably, “https://kryptomoney.com/rbi-panel-explore-a-rupee-backed-digital-currency/” target=”_blank” rel=”noopener noreferrer”>exploring the feasibility of a Rupee-Backed Digital Currency.
***Update (2018/09/11):- The Supreme Court Of India which was suppose to hear the RBI Crypto Ban Hearing today on 11 September has adjourned the hearing to tomorrow, i.e, 12 September 2018. Click here to read more details.
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