China’s ban on trading and mining cryptocurrencies is expected to boost India’s crypto space, and the country should come out with positive regulations to adopt this new technology, say industry executives.
People’s Bank of China (PBOC) recently declared that all crypto activity barring possession was illegal. The guidance, which was issued on 15 September, was posted online on Friday.
Reacting to the news, most cryptocurrencies slumped with bitcoin falling to as low as $41,018.41, as per Coingecko, a digital currency price and information data platform. Altcoins saw much deeper cut with ether falling towards the $2,700 level.
Experts say China’s crackdown on cryptocurrencies is likely in part because it wants to remove competitors to its digital yuan, which will be controlled by the government.
As per Kapil Rathi, founder, CrossTower, India has a huge opportunity to benefit from China’s crackdown on the crypto industry. “China forcing out such innovation and advancement is to India’s benefit, and the country should now embrace this new technology with open arms. Crypto can make India a global leader in this new technology,” he said.
Rathi believes that China is choosing control over innovation.
Nischal Shetty, CEO, WazirX, said: “Crypto has great potential to create more opportunities and contribute to our $5 trillion economy vision. Countries around the world are working towards crypto positive regulations and I’m confident that India will not take a regressive approach that could push us behind decades.”
This is not the first time that China has issued such guidance seeking curbs on the crypto industry. In the past, the country had banned initial coin offerings (ICOs), bitcoin transactions, and recently mining of bitcoin.
According to Sathvik Vishwanath, co-founder and CEO, Unocoin, there is definitely a lot for India to learn from how this plays out in China.
“It is sad to see that about 20% of the world’s population won’t have access to free transactions on the internet. On the other side, the crypto being completely on the internet, it would be next to impossible for China to enforce such a ban,” Vishwanath added.
In terms of prices, despite many curbs in China, cryptocurrencies have been able to recover losses and post gains in the past. Even on Saturday, there was a minor recovery seen in cryptocurrencies with bitcoin regaining the $43,000 level and ether closing in on the $3,000 level.
“This news (China ban) has led to a drop in crypto prices around the world, including India, which is a common occurrence after any news, which creates fear, uncertainty and doubt (FUD). However, I don’t see any long-term impact of this on the Indian crypto ecosystem,” said Shetty.
The article originally published on Live Mint.