Indian trading platforms have suffered from great uncertainty about the future of cryptocurrencies in the country. Authorities in Delhi have issued multiple warnings and have threatened to stifle the use of digital money for illicit purposes. They have repeatedly stated that cryptos, like bitcoin, are not considered legal tender in India. However, neither an outright ban, nor any clear regulations have been adopted to this day. While the work on a comprehensive legal framework continues, after unfulfilled promises that new regulations would be unveiled soon, some officials have recognized that it is proving impossible to effectively regulate cryptocurrencies.
Bitcoin Trade Drops in India amid Uncertainty and ClampdownDespite the absence of government regulations, Indian banks have taken matters into their own hands. Without any mandate from the Reserve Bank of India (RBI), commercial banks have been tightening the clamp on crypto trading. The country’s biggest financial institutions, including Citibank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and the State Bank of India, have already suspended trading accounts of bitcoin exchanges. They have also imposed measures to restrict crypto-related transactions conducted by ordinary citizens, with two banks notifying customers they cannot use their credit, debit and prepaid cards to purchase cryptocurrencies.
The regulatory uncertainty and the hostile attitude have caused a significant decrease in transactions on local bitcoin trading platforms, the Economic Times reported. “There is a 90 percent drop in the volume of trade across all Indian exchanges,” chief executive of Coinsecure, Mohit Kalra, told ET. “Our volumes are down from around 300-400 bitcoins daily in December to about 30-40 bitcoins a day now,” he added describing a 10-fold decrease.