South Korean cryptocurrency and token exchange Bithumb Global has decided to engage with the Indian government to regulate the use of Bitcoin and other cryptocurrencies in India.
The South Korean company is the largest Bitcoin exchange globally at the moment. This comes as a breather for Indian cryptocurrency platforms such as Zebpay, WazirX and Unocoin, who have been demanding regulations for crypto-to-crypto exchange, instead of a blanket ban.
According to a report in ET, Bithumb is looking to expand to the Indian market and cofounder and MD Javier Sim claimed the company wants to work with Indian exchanges and fund crypto startups.
“We are open to talking to regulators, working with them to be a regulated exchange. We are a strong brand from Korea and do not involve ourselves in unregulated or illegal trade.”
Nischal Shetty, co-founder and CEO of WazirX, has previously said, WazirX is hopeful that the authorities will acknowledge the impact crypto has on global economies. Shetty also added that the government should work closely with private players to bring regulations into this space instead of simply banning cryptocurrency.
Ban On Bitcoin In India
The Indian government and Reserve Bank of India (RBI) has been in support of banning cryptocurrencies due to lack of traceability, which increases the scope of frauds, terror fundings and no tab by the government etc.
In April last year, RBI had issued a statement barring all cryptocurrency-related services. The central bank said that it will not deal with or provide any service to the businesses that deal with cryptocurrencies such as Bitcoin. RBI also added that the regulated business which already provides such services shall exit the relationship within the next three months.
A public interest litigation (PIL) filed in the Supreme Court in July 2017, sought a complete ban on cryptocurrencies.
In July this year, a four-member inter-ministerial committee (IMC) headed by Subhash Chandra Garg, former finance secretary, also released a report that advised the government to completely ban private cryptocurrencies. However, it also suggests the government should look at introducing an official digital currency, while at the same time barring the possession of crypto-assets by individuals and companies in India.
The government report cites high volatility, the prevalence of malware used for illegal mining, high energy and power consumption for Bitcoin mining, cryptocurrency’s ability to affect the efficacy of RBI’s monetising capability as among the other primary reasons to recommend a complete ban on cryptocurrencies. The report cited China as an example which banned cryptocurrencies trading and ICOs in the country.
Cryptocurrency startup BuyUCoin referred to this as the dark day for the crypto industry, which was yet to flourish in India.
In the aftermath of the ban, Mumbai-based multi-cryptocurrency exchange and trading platform, Koinex has shut down its operations. Founded by Rakesh Yadav, Rahul Raj and Aditya Naik in August 2017, Koinex facilitated real-time trading of multiple cryptocurrencies like Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin on a single web platform, based on a peer-to-peer exchange model.