NEW DELHI/MUMBAI: A month after India’s central bank barred regulated lenders from facilitating cryptocurrency transactions, trading volumes have surged dramatically alongside a sharp rally in prices.
Exchange operators, investors and analysts say people are rushing to take advantage of a three-month window the Reserve Bank of India has given banks to sever ties with cryptocurrency traders and exchanges.
Getting in now enables investors to convert rupees into cryptocurrencies, which they can later swap for other coins via private trading platforms even after the central bank’s rules take hold.
“There is a positive sentiment in the industry that the government will not ban trading in cryptocurrencies, and even if formal banking channels cannot be used, people can move to crypto-crypto trading platforms,” Shivam Thakral, chief executive of BuyUcoin, a cryptocurrency exchange.
“New investors are coming to our exchanges while existing ones are regaining interest after the drop because they’re getting good value and are making money as the prices of cryptocurrencies move higher,” he said.
Prices of the volatile bitcoin in India are back up to 618,000 rupees ($9,270), recovering from a low of 350,001 rupees after the central bank’s announcement in early April.
Average daily volumes have also seen a sharp recovery and were as high as $75 million, close to levels before the rule changes, according to Pune, India-based cryptocurrency exchange Coindelta.
India’s government has taken a tough stance against the use of virtual currencies, fearing they could be used to finance illegal activities. The country’s finance minister said in February that they should be banned as a payment system.
But many investors hope the government will soften the central bank’s blow by regulating cryptocurrencies rather than banning them outright.
A panel with members from the central bank, the finance ministry and market regulator Securities and Exchange Board of India is expected to soon formulate a recommendation on what to do next.
People who have been trading cryptocurrencies would probably continue to do so if it remained legal, regardless of the banking ban, said 24-year old Shubham Yadav, co-founder and head of business at Coindelta.
Once the central bank’s prohibition on commercial banks’ involvement in cryptocurrencies takes effect, most trading is likely to move to peer-to-peer networks or social applications such as Telegram, according to retail investors.
In the meantime, some cryptocurrency traders have challenged the central bank’s order in court, citing constitutional issues.
Analysts argue that pushing virtual currencies out of the formal banking system would be counterproductive because it puts the money completely out of view of regulators — making illicit transactions easier.
Lawyers are advising clients to hang onto their investments and take a “wait and see” approach.
Traders and investors, meanwhile, say they are just trying to stay optimistic.
“Unlike fiat currency, prices of virtual currencies are based on people’s beliefs and aspirations,” BuyUcoin’s Thakral said. “The long-term vision for us and the people who are investing now is that cryptocurrencies are here to stay.”
India’s cryptocurrency investors bet trading will survive bank ban
India’s cryptocurrency investors bet trading will survive bank ban
- Prices of the volatile bitcoin in India are back up to 618,000 rupees
- India’s government has taken a tough stance against the use of virtual currencies, fearing they could be used to finance illegal activities
Free trade negotiations between GCC, India mark new phase of partnership, says sec-gen
RIYADH: The Gulf Cooperation Council’s secretary-general affirmed that the negotiations for a free trade agreement between the GCC and India, and the signing of the joint statement, represents a new phase of strategic partnership.
Jasem Mohamed Al-Budaiwi said that this contributes to enhancing close cooperation and strengthening economic and trade ties, according to the Saudi Press Agency.
This came during the signing ceremony of the joint statement on launching the free trade agreement negotiations between the Al-Budaiwi and India’s Minister of Commerce and Industry, Piyush Goyal, which took place in New Delhi, on Tuesday.
During the signing ceremony, Al-Budaiwi said that the Terms of Reference, signed on Feb. 5, provide a comprehensive and clear framework for these negotiations. The two nations agreed to discuss enhancing cooperation in vital strategic areas, including trade in goods, customs procedures, and services.
Additionally, the framework covers Sanitary and Phytosanitary measures, intellectual property rights, cooperation on Micro, Small, and Medium Enterprises, along with other topics of mutual interest. This reflects the comprehensive nature of the agreement and its ability to keep pace with the future economy.
Al-Budaiwi expressed hope that these negotiations would lead to a comprehensive and ambitious free trade agreement that works to remove customs and non-customs barriers, enhance the flow of quality investments in both directions, and achieve further liberalization in trade and investment cooperation between the GCC and India for mutual benefit.
This would provide a stimulating economic environment and an investment climate that opens broad horizons for the business sector, supports supply chains, and accelerates the pace of economic growth in line with the ambitious developmental visions of the GCC states.
The top official affirmed the full readiness of the General Secretariat to host the first round of negotiations at its headquarters in Riyadh during the second half of this year.
The two sides held a meeting during which they reviewed the existing cooperation relations between the GCC and India and discussed ways to develop and elevate them to broader horizons, serving mutual interests and enhancing opportunities for strategic partnership between the two sides, particularly in the economic, investment, and trade fields.
They praised the role undertaken by the negotiating teams from both sides, appreciating the efforts contributing to reaching a comprehensive agreement that enhances economic integration and supports the smooth flow of trade between the two nations.
