To put some clarity on ban it must be informed that the central bank has not banned trading in Cryptocurrency per se. It has only asked the banks and other bodies regulated by RBI to sever ties with crypto exchanges in India.
We maintain that the limited restriction is unfounded. Investors both retail and institutional have already tasted the blood and is not going to relent on crypto trading. Of course, the Crypto exchange will bear the brunt in short-term but most will move their business outside like Singapore and continue to do business.
Cryptocurrency is an innovation that creates jobs and adds to the GDP. The RBI might have erred in this case. The issue is being deliberated at the judicial level.
However, Crypto to crypto exchange is allowed to function. People having crypto wallet will create new wallet from outside India.
These exchanges are in the process of moving abroad. One can still invest in Cryptocurrency, maybe not in India but a foreign destination.
“Businesses need their freedom to operate with efficiency, so shifting out is what exchanges will, sooner than later, do. Moreover, the people involved in cryptos have invested their time, effort and resources over many years to create their ventures or gain cryptocurrencies which they won’t give up easily,” said Awanish Rajan, CEO of IDAP, a cryptocurrency exchange
Companies like Zebpay and Unocoin will have to shut operations in India but the business is so lucrative that they will move the company to some other country like Singapore and start again.
The monetary advantage of investing in cryptocurrency is such that investors will continue to invest in the virtual currency via foreign exchanges. Moreover, the profits accrued can be converted to a dollar, pound and other currencies. The investor can book profits and have their money wired to them.
In fact, instead of banning the RBI could have imposed partial regulation on virtual currency. They could have mandated KYC norm and AML to manage the risk.
Bringing cryptocurrency in RBI net could have helped them tax the investor in form of capital gains tax.KYC could have introduced transparency.
Billions of money in tax is now sure to be lost by the government. Investors are gung-ho on virtual currency.
They will continue to invest in virtual currency in foreign destinations.
How to bring money back to India?
Once the Bitcoins are sent to wallets outside India, you can convert them to Euro or Dollars and transfer to your Indian accounts or a relative’s account in any other country. Ask them to send your money via wire transfer or give it to you whenever they are in India. Yes, some fees will be deducted but if you have appreciated the value of your BTC enough, it will be negligible.
The Bitcoin business is far from being null and void. Contrarily the business will only witness an upturn