Indian crypto markets crash following crypto bill announcement
As regulatory discussions taking place in India around a crypto ban has caused massive panic over those selling on the country’s major crypto exchange WazirX, there has been a huge price drop on leading crypto tokens, including Bitcoin and Ether.
The Indian Parliament has announced the introduction and listing of 26 new bills in its Winter Session, including the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. The new bill is reportedly seeking for a legislative vote to create an official digital currency while imposing a strict ban on “all private cryptocurrencies,” from November 29.
A mass sell-off occurred on the WazirX in the wee hours of November 24 around 3:30 AM UTC when the price of Bitcoin fell from nearly Rs 4,600,000 (roughly $61,820.73) to Rs 3,917,659 (about $52,650.55). A drop of 14.8 per cent had been recorded within only two hours. Similarly, the locally popular crypto tokens, including Ether and Cardano, had experienced double-digit price depreciation on the exchange.
CEO of WazirX, Nischal Shetty, was quick to highlight that the Indian crypto market generally trades at a premium in comparison to the global market. Shetty said that this event of “panic selling” has led the Indian market to correct, and the prices have “reached the global level.”
Shetty further pointed out the various use cases of cryptocurrencies as a digital asset or utility, quoting India’s former Finance Secretary, Subhash Chandra Garg’s suggestion that there must ideally “be a prohibition on the ‘currency’ use case of crypto,” if there is any.
CEO of another crypto exchange OKEx, Jay Hao, spoke about the need for a nuanced approach towards the regulatory framework of crypto assets in India, sharing that the country is home to the highest number of cryptocurrency owners in the world. Thus the onus lies on the Indian government “to protect the interest of a large number of crypto investors” within the country.
Speaking about India’s crypto ban, CEO of BTC Markets, Caroline Bowler, said that the current ban “won’t work in the long-term”; in fact, it would “be a step backwards.” Bowler added that banning the crypto “is not an option to protect investor interest.”
Bowler also stated that the thing with cryptocurrencies is that although governments try banning or containing them, “the very decentralized nature of the technology somewhat prohibits that.”
In a final word of advice to Indian inventors, Shetty has said they need to have faith in the lawmakers instead of panicking.
The crypto regulations have come after a parliamentary panel discussion on cryptocurrencies that took place on November 15, wherein a plurality of regulators concluded that, since crypto can’t be stopped, it should be regulated more heavily.
A representative from the Reserve Bank of India had said in August that it had planned to commence preliminary trials for a central bank digital currency before 2021 ends.
Currently, India is one of the largest crypto markets in the world, having over 20 million crypto investors.