When it comes to India and crypto’s relationship, it can be best described as antagonistic and aversive. India, among other nations has been particularly belligerent towards cryptocurrency, so much so, that it had constituted a high-level intermediate committee to report on various issues pertaining to cryptocurrency.

The committee had subsequently in 2019, recommended a blanket ban on private cryptocurrencies in India. This particular suggestion by the committee had put many crypto investors on the wrong side of the law, who had started approaching their lawyers for legal advice.

Authorities’ reaction

With such a belligerent attitude of Indian authorities towards the digital currency, the country’s biggest banks have been trying to emphatically distance themselves from the crypto community, apparently egged on by the Reserve Bank of India.

Working along the same lines as the government, in May, the HDFC Bank had sent a rather threatening email to their customers, warning them against virtual currency transactions. It is to be noted that the email had cited an RBI circular that was published on April 6, 2018. The circular had reportedly instructed all of the businesses it regulates to cease any involvement with cryptocurrencies. Additionally, such a stringent activity was also conducted by the State Bank of India. Similarly, several large banks, namely ICICI Bank, the country’s largest private lender too stopped providing services to crypto exchanges.

Investors’ woes

As it can be anticipated, the banks’ nefarious emails had prompted an uproar among their customers and crypto investors, with many taking to social media to express their discontent. But why are investors raging with anger? Simple answer- high, impalpable profits that crypto trading offers them. According to a research report by Bloomberg, the technical outlook for Bitcoin remains strong with the price of the cryptocurrency all set to surge around 600% to hit $400,000 level in 2021.

Government’s repugnant attitude begs a question that in contrast to the Indian government are all authorities in India wary of the digital currency? Apparently not. Recently the RBI’s circular was struck down by the Supreme Court. The court contended in its March 2020 ruling that the RBI had failed to provide sufficient proof, and to detail instances of losses arising from crypto transactions, that might merit such a drastic measure as its de facto ban on banks’ involvement with cryptos. Thus, it can be rightly stated, that to some extent, pressure is being built on the authorities to at least lift its temporary ban on the crypto services.

It is no news that Elon Musk has been an ardent endorser of the cryptocurrency. Where many might presume him to be the crypto guru, many can’t help garb their aversion towards him due to his cryptocurrency manipulation charades that onsets great volatility in the market. It is to be noted, it is due to this very reason, Indian authorities are so averse towards the idea of cryptocurrency.

The digital currency granting anonymity to criminals for the nefarious crimes is considered as a safe haven for the digital criminals. But more importantly, it is the inefficiency or the inability to track the real perpetrator of the crime that is the sole reason for India debunking the crypto supremacy. Interesting enough, loss of revenue is also a big challenge that the government faces. As it is known, crypto market is unregulated, thus it is often quite arduous or rather impossible to track payments and hence to generate revenue through transactions.

Additionally, cryptocurrency being a highly volatile market, which might not be running rationally poses a big risk of a financial bubble that is doomed to burst. As it is known, during the pandemic, when consumer and investor confidence was at an all-time low, crypto market was booming, rather skyrocketing.

In contrast to individuals, various cities like Miami have also tried to pursue cryptocurrency by conducting state wise crypto fares in order to court crypto investors to town.

With El Salvador becoming the first country in the world to grant legal tender to the contentious digital currency, pressure to flip the coin in favor of crypto is rising. But with irrational behavior associated with the market and various comments like “Crypto isn’t the real economy” by Elon Musk and not-so endorsing statements by the former US president Donald Trump, who at best, considers Crypto a farce, both the sides of crypto, at the current moment, are evenly balanced. Thus, it will be interesting to see that who wins this battle of contentious crypto war.