Investors in India are flocking to trade cryptocurrencies before the ban order by the Reserve Bank of India takes effect. There is a positive sentiment in the local crypto community that the Indian government will not outright ban crypto trading.
Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space
Investors Rush to Get Into Crypto
It has been a month since the Reserve Bank of India ordered banks and financial institutions under its control to stop providing services to cryptocurrency exchanges. The central bank has given banks three months to end their relationships with crypto operators. However, ever since the order, cryptocurrency trading volumes in India have surged dramatically.
“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,” Reuters elaborated, adding:
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.
Shivam Thakral, CEO of crypto exchange Buyucoin, was quoted saying “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.”
Retail investors believe that “most trading is likely to move to peer-to-peer networks or social applications such as Telegram” after the three month period is up, the news outlet added.
Crypto Trading Ban Unlikely
The RBI’s order has already been challenged in court by a cryptocurrency firm.
On Saturday, the Indian Express reported that Justice Rajiv Shakdher “issued a notice to the RBI, the finance ministry and the GST Council and sought their stand on the petition challenging the RBI’s April 6 circular ‘Withdrawing Banking Support to Virtual Currency Exchanges’.”
Cryptocurrency firm Flintstone Technologies Pvt Ltd “sought [the] court’s direction for quashing of the circular issued by the Reserve Bank of India as the same was ‘arbitrary, unconstitutional’,” the publication detailed, adding:
The company submitted that [the] circular issued by the RBI is devoid of any due application of mind and will cause huge prejudice to those who have invested their hard earned money into the business and transaction pertaining to the virtual currencies and cryptocurrency.
Shubham Yadav, Coindelta’s co-founder, believes that crypto traders would likely continue to trade “if it remained legal, regardless of the banking ban,” Reuters conveyed.
Thakral was then quoted by the publication, “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.”
Trading between cryptocurrencies, which the central bank ban does not penalize, has already begun to ramp up. Last week, two Indian crypto exchanges started offering crypto-to-crypto trading – Zebpay and Koinex. The latter offers 23 trading pairs while the former offers one.
What do you think of Indian traders rushing to trade crypto before the RBI ban takes effect? Do you think the RBI will take further action? Let us know in the comments section below.
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