Cryptocurrency: RBI’S decree will shatter business

NEW DELHI: The Reserve Bank of India’s announcement on cryptocurrency has not only stirred the market but left both the traders and investors in a state of loss with many of them thinking of wrapping up their operations.

“This unprecedented move by the RBI has stirred the market and impacted the industry at various levels. The exchanges have witnessed a steep decline in daily trade volumes and price fall for all tokens. In addition, traders who were looking at long-term investment through crypto assets will suffer heavy losses, especially those who have made hefty investments, out of their livelihood savings,” Rahul Raj, Co-founder and CEO, Koinex, said.

While Praveenkumar Vijayakumar, Founder and CEO, Belfrics Global, said the announcement is an end of the road for many Indian exchanges and a clear letdown for new investors, it is not going to have much effect on cryptocurrency transactions in the long run. “As and when global prices advance, Indians will find their way to get these assets through p2p (peer-topeer) markets,” he said.

“Nowhere it is stated that cryptos are illegal. The only thing which has been stopped is banking service. If anybody can justify the cash amount for which they buy or sell the cryptoassets, the trading goes on,” Bharat Verma, CEO and co-founder, Pluto Exchange, said.

Last week, the RBI, in its first bimonthly Monetary Policy Committee meeting of this fiscal, announced that regulated entities already providing services to any individual or business dealing in digital currencies have been given three months to exit the relationship.

“The RBI has cautioned on at least three occasions members of the public and users of virtual currency regarding risks they are exposing themselves to through these cryptocurrencies,” RBI Deputy Governor B P Kanungo said.

“We have now decided to fence Rbi-regulated entities from the risk of dealing with entities associated with virtual currencies. They are required to stop having a business relationship with entities dealing with virtual currencies forthwith, and unwind the existing relationship within three months,” he added.