crypto ban: India moves away from banning crypto and not against it: Ajeet Khurana
The crypto industry is going through a lot of change. The association for cryptocurrencies was recently wound up; we do not know if there will be a new one. Many of the political decisions are beginning to have an impact on trading volumes. Do you think what the Minister of Finance said in the Storting yesterday makes it clear that a ban is still on the table if there is a global consensus?
I believe that if there is a global consensus, it can be banned. Technology cannot be banned, but regulation can lead to bans. But it seems to be an impossibility, because in most open economies there is a more favorable environment, and therefore there is no ban in other countries. In fact, the clarity that has come is that India will not take a one-sided stand, and therefore we are moving away from prohibition and not towards it.
What is the effect because the Indian government has made two things clear that the RBI wants a cryptocurrency ban, and they are not rushing into it. This allowed the entire ecosystem to flourish on a budget. But that tax of 30% is falling. What is the current status?
If we ignore the price movement in the market and focus only on the regulatory aspect, the current status seems to be a bit gloomy, first and foremost because the government is not in the mood to give a thumbs up at any time. The right direction here would be for the government to ask everyone who is in this place – the stock exchanges as well as the investors – to disclose their activity in some form of income tax or other filing.
Going forward, what is the state of affairs regarding these crypto exchanges? The big factor has also been a global meltdown in the prices of crypto. Do we see more investors trying to go out and fewer coming in?
We seem to be moving sideways over the last month and a half. It was a big crash about two months ago. The world’s largest crypto player Coinbase has fallen to about a quarter of market value. We currently see that stock exchanges that expanded very quickly see about a 90% reduction in income. They have to start cutting corners, and that does not sound good to me.
We are already seeing some effect of cutting corners. Do you think that many of these companies may not last long?
If they are pure exchange companies, even with the reduced volumes, they may be able to survive even longer periods of time such as two to three years. However, several of these exchanges began to enter into secondary businesses such as loans and lending. The bad news we hear from people like Vauld and Celsius and everything else comes from their lending and lending business. They are not heading for a good time.
The future of crypto still has a sword hanging over it, but the finance minister is talking about a global consensus. Now there is nothing closer to being found today than it was a year or two ago. What does that mean in real terms?
In real terms, it looks like a nice fig leaf that does not allow the government to take unwanted actions and claims that they were ready for it, but that the world was not ready for it. Therefore, we would rather go with where the whole world goes, which is my recommendation as well.
Where is the whole world going right now? Everyone is out of crypto. There does not seem to be any urgency for new nations to accept payment in crypto. The basic question of what is the underlying asset continues. So really no clarity worldwide?
No one in crypto has really asked for crypto to become a legal tender. It is very interesting that regulators talk about it, but people in crypto do not even make such a demand. What is happening with MICA, which arrives in the EU about two weeks ago, is that there is greater regulatory acceptance, which comes from clarity. Regulations, other than favorable or unfavorable, must be clear, and they are happening all over the world.
