INSUBCONTINENT EXCLUSIVE:
RBI's April 6 circular against virtual currencies was challenged in the Supreme Court
When the Reserve Bank of India's (RBI) three-month deadline given to banks for severing their
ties with digital currencies looms closer, some cryptocurrency exchanges have packed their bags to shift the base abroad, so as to evade the
It is worth mentioning that the RBI, on April 6, banned the commercial banks from having business relations with the entities that deal in
They were instructed to end the relations (if any) within three months that will lapse on July 5
India-based founders but has set up the company in Estonia (Europe) to run the crypto exchange legitimately."Businesses need their freedom
to operate with efficiency, so shifting out is what exchanges will, sooner than later, do
Moreover, the people involved in cryptos have invested their time, effort and resources over many years to create their ventures or gain
cryptocurrencies which they won't give up easily," said Awanish Rajan, CEO of IDAP, a cryptocurrency exchange.IDAP is not an aberration
Another crypto exchange BuyUCoin, for instance, is in the process of shifting to Singapore by August and releasing a crypto token in run
upto the expiry of deadline of RBI's ban, and in wake of finance ministry's relentless diktats against the digital coins
"We were running the exchange for the past two years but lately, we have decided to move abroad so as to survive," said Shivan Thakral,
co-founder and CEO of BuyUCoin.Experts call this phenomenon (of exchanges shifting base to abroad) quite natural in wake of "stifling"
regulations by the regulators."Though there is nothing to panic as of now
However, the exchanges have found a reason to leave the country, at least for the time being," said Niranjan Patil, cryptocurrency expert,
and chief hedging strategist (currencies), FXWirePro, a Bengaluru-based company.Mr Patil further added that bitcoins and other
cryptocurrencies are not finished in India as some tend to believe, because the central bank had stated in April first week that the
government is working on its own crypto coin
"Time and again, the finance ministry has said that it seeks crackdown against the cryptocurrency-led ponzi schemes, but not against the
blockchain technology per se."RBI's April 6 circular was challenged in the Supreme Court, which initially refused to grant an injunction
However, the matter is now before the apex court that will next hear it on July 20.Even prior to the April 6 circular, the Reserve Bank of
India (RBI), on several occasions, cautioned the cryptocurrency users, traders and holders of digital currencies
The first RBI warning was sent in December 2013, the second in February 2017 while the last one in December 2017.However, instead of issuing
warnings after warnings, the experts suggest that the government should frame a set of regulations so as to clear the air over uncertainty
of the future of blockchain and cryptocurrency trading."The more pragmatic approach would be regulating the cryptocurrencies
Having proper laws and tax rules will add the crypto economy to India's mainstream economy and boost it further
ICOs are a boon for startups, having a conducive environment for them and blockchain will have positive effects on job creation, innovation
and GDP," added Mr Rajan.While shifting the base abroad, the exchanges don't happen to breach any domestic laws
"We consulted top corporate law firms and have followed all standard procedures and guidelines
Any new laws set forth by the Indian government in the future we will comply with
Moreover, we don't provide the Indian rupee-denominated crypto trading, so there is no violation," added Mr Rajan from IDAP, (idap.io), a
cryptocurrecy exchange that is set to offer an array of derivatives products for crypto assets,and is currently offering free trading to its
IDAP plans to start token pre-sale from June 25.
