Reserve Bank of India - Most confused financial entity right now!

[jrrsparkles]

All I can see is India plans to ban bitcoin, new law proposed to ban cryptocurrency,etc but they are yet to pass the bill right? Every banks are against decentralization for sure so you can't expect from government to think about benefits for the users and not for themselves.

Here is the latest news on this subject: https://www.livemint.com/market/cryptocurrency/get-ready-for-hefty-penalty-to-legalize-your-crypto-assets-11613064974027.html

According to sources close to the government, the existing holders of cryptocurrency will be "allowed" to exit, provided they are ready to pay a financial penalty. Now this penalty can range from anywhere between 50% and 100%. And whatever scraps you receive after this measure will be subjected to income tax (which is 42.7% for the topmost slab).

Essentially, the Indian government is confiscating all the wealth from the cryptocurrency holders. 

Planned to announce and yet to be finalized mentioned in this article. This is just a statement from exchange so its can't be taken as official, well even if they ban it completely it is not going to work in any effective way. Already there are ways to convert cryptos to fiat without submitting any KYC documents, like Localcryptos so its time for the government to wakeup and regulate instead of banning.

[bryant.coleman]

Planned to announce and yet to be finalized mentioned in this article. This is just a statement from exchange so its can't be taken as official, well even if they ban it completely it is not going to work in any effective way. Already there are ways to convert cryptos to fiat without submitting any KYC documents, like Localcryptos so its time for the government to wakeup and regulate instead of banning.

Ideally if the government is concerned about preventing misuse of cryptocurrency, then they should regularize rather than banning it. But here the intention is something different. As many of the users have pointed out, some of the businessmen who are closely associated with the ruling party have taken a keen interest in the cryptocurrency sector. This proposed bill was created on their behalf, to get rid of the competition. They have tried this strategy with several other sectors in the Indian economy, and have achieved a great deal of success. They are hoping to repeat the same with cryptocurrency as well.

BTW, the penalty being proposed may be termed unconstitutional. Investments made before the ban can't be penalized, as the asset was not illegal at that time (someone working in the legal profession may be able to clarify further). And in case the proposed bill is unconstitutional, then it will be nullified by the supreme court of India.

[jrrsparkles]

Planned to announce and yet to be finalized mentioned in this article. This is just a statement from exchange so its can't be taken as official, well even if they ban it completely it is not going to work in any effective way. Already there are ways to convert cryptos to fiat without submitting any KYC documents, like Localcryptos so its time for the government to wakeup and regulate instead of banning.

Ideally if the government is concerned about preventing misuse of cryptocurrency, then they should regularize rather than banning it. But here the intention is something different. As many of the users have pointed out, some of the businessmen who are closely associated with the ruling party have taken a keen interest in the cryptocurrency sector. This proposed bill was created on their behalf, to get rid of the competition. They have tried this strategy with several other sectors in the Indian economy, and have achieved a great deal of success. They are hoping to repeat the same with cryptocurrency as well.

BTW, the penalty being proposed may be termed unconstitutional. Investments made before the ban can't be penalized, as the asset was not illegal at that time (someone working in the legal profession may be able to clarify further). And in case the proposed bill is unconstitutional, then it will be nullified by the supreme court of India.

Even if they are sure about making the cryptos completely ban, it is mandatory to give enough time frame and they can't penalize anyone in that time period because cryptos are completely legal at the time when they accumulated it. If they are not paying their income taxes then it is separate which is not related to ban ot anything. I am also expecting what will be the final result in such country where more people are making themselves money with the way they have when their government is not helping at the hard times.

[South Park]

Why regulate a cryptocurrency that can't be regulated?

I don' know why they can' understand that? They could stop the use of Bitcoin in their country but obviously, there are a lot of people out there holding their Bitcoins and still earning a profit with this huge surge. I think a lot of people would be pissed about their government and they won't be using that centralized digital currency, I mean, who would use it?

It is not that they do not understand this they actively refuse to accept this truth, governments do not want to accept that there is a currency out there that they can not regulate no matter what they do, but this is because as we know governments are really good at destroying anything that is centralized but they have great trouble dealing with decentralized enemies and unfortunately for them cryptocurrencies were created specifically to resist any attempt to try to censor them and the more measures they put in place the harder people will resist.

[uneng]

Why regulate a cryptocurrency that can't be regulated?

I don' know why they can' understand that? They could stop the use of Bitcoin in their country but obviously, there are a lot of people out there holding their Bitcoins and still earning a profit with this huge surge. I think a lot of people would be pissed about their government and they won't be using that centralized digital currency, I mean, who would use it?

It is not that they do not understand this they actively refuse to accept this truth, governments do not want to accept that there is a currency out there that they can not regulate no matter what they do, but this is because as we know governments are really good at destroying anything that is centralized but they have great trouble dealing with decentralized enemies and unfortunately for them cryptocurrencies were created specifically to resist any attempt to try to censor them and the more measures they put in place the harder people will resist.

As they can't regulate it in a efficient way they try to forbid exchanges between btc and fiat maximum as possible. This way bitcoin holders will be unable to cashout their profits to local currency and consequently unable to spend their money, as very few places accept bitcoin as payment method. I can't deny it's a smart move from the government, but people can still hold their bitcoins safely for the future, that is what really matters.
Unfortunatelly those who need to convert crypto to fiat frequently are prejudiced for now. P2P transactions are a possible solution, but not everyone has access to trustful dealers to trade with.

[Sithara007]

The damage has been done already, irrespective of whether they are going ahead with the ban or not. When the news about the ban first came out, the exchange rate of Bitcoin was around $28,000 per coin. A lot of the users sold their coins, after the bill was listed in the parliamentary website. Existing users and new users cancelled their plans for new purchases due to the uncertainty. And you can see the impact this had. Most of the Indian users didn't benefitted from the recent bull run due to these factors.

[amishmanish]

---snip--

So no, they're not confused. It has been their plan to insidiously move the crypto industry out from the beginning.

But it won't work - a ban would simply not be enforceable given the volume of OTC and P2P trade going on.

While you are right that this looks more than just confused reactions, I would not take the present government lightly on any of this. A lot of Indians don't realize this and are quick to call people "Anti-national" for pointing this out, but we are now essentially a Right wing country where any dispute with the Govt will be brutally and quickly suppressed.

Advanced democracies generally work in ways where the demands of individual groups, even smaller groups, are kept into mind while framing laws. In today's India, if you are a farmer protesting, then you can be branded as a terrorist, a middleman, a good-for-nothing, spolit on subsidies idiot.

If you are a young student talking about freedom of expression and planning protests, you can be arrested.

If you are the media and don't align yourself in going all out to praise the supreme leader, you will have the ED and CBI sent against you.

If you are Supreme Court judge and you keep the rulers happy, you will be given a chance to wiggle out of your own cases and be given a seat in the upper house.

If the ruling party decides its going to be a ban, i suggest that everyone should ensure they have an alternate plan.

On the better side of things, there has been an ongoing campaign from ZebPay about writing to your constituencies MP. I got a mail this morning and sent it to the MP's id. Make sure you send it forward and ask those you know to garner support on twitter etc.

[bryant.coleman]

I completely agree with what amishmanish has written in the previous post. The regime in India has become autocratic, authoritarian and arrogant. If they don't like something, then they will simply ban it. They don't care about opposing voices. They believe that they don't need to listen to the opposition and the minority groups, because they are having a raw majority in both the houses of the parliament and unlimited support form the supreme court. On top of that, the opposition in India is a disorganized and confused lot.

[darewaller]

The damage has been done already, irrespective of whether they are going ahead with the ban or not. When the news about the ban first came out, the exchange rate of Bitcoin was around $28,000 per coin. A lot of the users sold their coins, after the bill was listed in the parliamentary website. Existing users and new users cancelled their plans for new purchases due to the uncertainty. And you can see the impact this had. Most of the Indian users didn't benefitted from the recent bull run due to these factors.

Things are still really nice in India if the market and news are to be believed because there are some decent exchanges like WazirX but the continuous pressure from the Reserve Bank is what is making things worst. At one time they say that the usage of crypto is banned and anyone indulged into crypto transactions will be punished, later the courts lifted the ban and allowed users to transaction in Bitcoins.

Now again they are making things worse by not giving out a clear statement regarding the status of Bitcoins. I don't know how courts and banking system in a country be as confused as they are, they should either ban or just allow Bitcoin transactions but the decision should be final and solid. I know it might be a massive mistake if they legalize Bitcoins because of the anonymity problems but maybe they can allow BTC transactions but increase taxes on them.

@amishmanish
I know and I even followed some of the news about riots that happened in India recently regarding some Hindu and Muslim issues over a bill passed by the government. It is sad to see a democratic country slowly turning into a king and servants kind of situation or call it dictatorship.

Regarding Zebpay, they even tried the last time their ultimate best to get Bitcoins legal status, but they failed because the Reserve Bank doesn't care what these companies think, all they see is that how they benefit from the banning or legalizing of bitcoins in the country.

[amishmanish]

Now again they are making things worse by not giving out a clear statement regarding the status of Bitcoins. I don't know how courts and banking system in a country be as confused as they are, they should either ban or just allow Bitcoin transactions but the decision should be final and solid.

This crisis of decision making is the result of the years of rhetoric about need for a "decisive leader". Everybody these days simply looks up to the authority for the smallest of decisions. Delegation of powers has taken a beating as the investigative agencies plus media are being used to hound everyone who goes against the reigning narrative of "social/ cultural revival"

@amishmanish
I know and I even followed some of the news about riots that happened in India recently regarding some Hindu and Muslim issues over a bill passed by the government. It is sad to see a democratic country slowly turning into a king and servants kind of situation or call it dictatorship.

It is indeed sad. It pains to see our country squandering its reputation of pluralism and fairness as the ruling part decided to play the dangerous game of majoritarianism, something that Indian society so astutely avoided despite its teeming diversity through the post-independence years. It is not just about the Hindu-Muslim fear mongering. There is a pattern of behavior throughout government institutions, bureaucracy and media where any kind of alternate viewpoint or dissent is frowned upon and trolled by branding it as foreign conspiracy, fear of Islam, Christian conversion etc etc. The basic tenet of democracy; free speech and respect for dissenting voices is being lost in this blind race towards revival of Hindu cultural identity.

[palle11]

So what the heck is that? Why they don’t understand we don’t want centralisation in the first place and that’s why we are using the bitcoin. LOLZ

Yes, because they want a form of control. Government are people you elect to rule over you with rules of the land and they have to be relevant in the system. If they allow a decentralized system, they don't know what you are doing in the country. So a centralized system is the way they can succeede. They have control of banks and fiat which are major instrument of governance.

I completely agree with what amishmanish has written in the previous post. The regime in India has become autocratic, authoritarian and arrogant. If they don't like something, then they will simply ban it. They don't care about opposing voices. They believe that they don't need to listen to the opposition and the minority groups, because they are having a raw majority in both the houses of the parliament and unlimited support form the supreme court. On top of that, the opposition in India is a disorganized and confused lot.

This is known with third world countries, abuse of power. India government need to listen to opposition which have positive critism. Though with diverse groups but with sincerity they can become a very strong bloc with there population.

[bryant.coleman]

A few days back, there was an article in the Mint. It claims that by imposing a hefty penalty over the existing 42.7%, and then forcing existing cryptocurrency users to sell their holdings, the government is expecting a windfall. Things like these would be abhorred in democratic countries and will be termed as wealth confiscation. But in today's India, where authoritarian policies by the ruling party is gaining increasing acceptance, all this will be treated as normal. The users are divided. Some of them want to take the fight to the supreme court. Others want to migrate to other countries which don't have these sort of draconian legislations.

[South Park]

It is not that they do not understand this they actively refuse to accept this truth, governments do not want to accept that there is a currency out there that they can not regulate no matter what they do, but this is because as we know governments are really good at destroying anything that is centralized but they have great trouble dealing with decentralized enemies and unfortunately for them cryptocurrencies were created specifically to resist any attempt to try to censor them and the more measures they put in place the harder people will resist.

As they can't regulate it in a efficient way they try to forbid exchanges between btc and fiat maximum as possible. This way bitcoin holders will be unable to cashout their profits to local currency and consequently unable to spend their money, as very few places accept bitcoin as payment method. I can't deny it's a smart move from the government, but people can still hold their bitcoins safely for the future, that is what really matters.
Unfortunatelly those who need to convert crypto to fiat frequently are prejudiced for now. P2P transactions are a possible solution, but not everyone has access to trustful dealers to trade with.

That is something they are capable to do, after all they control the fiat system so they can block bank accounts if that is what they want, however if they do this then people are simply going to move to P2P, now this is not going to be able to support the current trade levels that we see and this could decrease the price, but since governments are in such a difficult shape due to the pandemic I doubt every single one of them will decide to do something like this and many exchanges will simply move to jurisdictions that cater to them simply because the taxes the industry will bring are incredibly high, so no matter what governments do it seems they will never be able to come close to eliminate cryptocurrencies.

[Sithara007]

That is something they are capable to do, after all they control the fiat system so they can block bank accounts if that is what they want, however if they do this then people are simply going to move to P2P, now this is not going to be able to support the current trade levels that we see and this could decrease the price, but since governments are in such a difficult shape due to the pandemic I doubt every single one of them will decide to do something like this and many exchanges will simply move to jurisdictions that cater to them simply because the taxes the industry will bring are incredibly high, so no matter what governments do it seems they will never be able to come close to eliminate cryptocurrencies.

P2P platforms are not safe either. If you are using an Indian bank account, then it gets risky. Because the government can easily obtain transaction logs for all these accounts. I have checked a number of p2p platforms within India, and many of the traders have gone in the stealth mode. They have removed the Whatsapp numbers from their profile and have instead given the Telegram ids. And from what I have heard, the payments are being made from multiple bank accounts to prevent detection.

[Kakmakr]

I think people must understand how politics work, before they even attempt to analyze it. Politicians are only concerned with "Power" ...so they will do anything to retain that power. (Some politicians will even murder their competition)

So now let's look at India and how the changing political decision makers are influencing the policy regarding Crypto currencies. Every time when there are a "change" .... the new person in that post are changing the policy to leave a legacy. (even if that only last 4 or 5 years whilst they are in that position)

We see this in the USA now with butt hurt Yellen, where she now wants to implement strict regulations on Crypto currencies out of revenge for the "Bitcoin Guy" who spoiled her speech on National Television.

In India, every political decision maker have their own agenda and they want to display their power, by implementing something that will ultimately protect their position. (So they try to eliminate the competition to their national currency to gain favor from their Puppet Masters) 

[Vishnu.Reang]

In India, every political decision maker have their own agenda and they want to display their power, by implementing something that will ultimately protect their position. (So they try to eliminate the competition to their national currency to gain favor from their Puppet Masters) 

There are many theories floating around right now... one theory is that the government has run out of cash and is desperately looking for new avenues. Analysts have pointed out that the proposed ban and the penalty on current Bitcoin holdings will make the government richer by around $5 billion, which is a huge amount in India. And Bitcoin community in India is numerically not significant and therefore the government doesn't feel that there will be much repercussions.

What they are planning is to impose anywhere from 30% to 60% penalty on the current Bitcoin holders (larger the holding, higher will be the penalty). On top of this penalty, income tax of up to 42.7% will apply and GST of either 18% or 28% will be applicable. In short, the Bitcoin holders will see more than 90% of their net worth vanishing in the form of penalty and taxes. This is similar to what the Cypriot government did in 2013 when they ran out of cash. They just confiscated the bank deposits and imposed a 87.5% haircut.

[justdimin]

A few days back, there was an article in the Mint. It claims that by imposing a hefty penalty over the existing 42.7%, and then forcing existing cryptocurrency users to sell their holdings, the government is expecting a windfall. Things like these would be abhorred in democratic countries and will be termed as wealth confiscation. But in today's India, where authoritarian policies by the ruling party is gaining increasing acceptance, all this will be treated as normal. The users are divided. Some of them want to take the fight to the supreme court. Others want to migrate to other countries which don't have these sort of draconian legislations.

Migrating to countries like Malta would be the best option given how easy and excellent the laws are there regarding the use of Bitcoins and crypto in general and this is why most of the companies are registering in Malta so I hope they can find the right place once India actually implements a ban on crypto.

Imposing taxes on crypto is interesting because if they are going to do so it will mean they are looking at the use of Bitcoins as legal and only then taxes can be collected on their use.

It is such a saddening thing to see a growth of a country in terms of Bitcoins and technology is being cut short because of some corrupt or uneducated leaders who I am sure don't even realize how Bitcoins work and what is blockchain technology. I have a lot of respect for Indian users and members because I work with some and they are really down to earth and work on minimum wages and work their heart out for you.

[bryant.coleman]

^^^ Migrating to European countries from India is not easy. It is going to be too expensive for the vast majority of the users. The best option they got right now is to travel to the GCC nations (such as UAE and Kuwait) on a temporary visa and sell their coins there (in most of the GCC nations, there are no taxes on profit from cryptocurrency). Other options include Thailand, Hong Kong and Russia.

[Karartma1]

A few days back, there was an article in the Mint. It claims that by imposing a hefty penalty over the existing 42.7%, and then forcing existing cryptocurrency users to sell their holdings, the government is expecting a windfall. Things like these would be abhorred in democratic countries and will be termed as wealth confiscation. But in today's India, where authoritarian policies by the ruling party is gaining increasing acceptance, all this will be treated as normal. The users are divided. Some of them want to take the fight to the supreme court. Others want to migrate to other countries which don't have these sort of draconian legislations.

Migrating to countries like Malta would be the best option given how easy and excellent the laws are there regarding the use of Bitcoins and crypto in general and this is why most of the companies are registering in Malta so I hope they can find the right place once India actually implements a ban on crypto.

Imposing taxes on crypto is interesting because if they are going to do so it will mean they are looking at the use of Bitcoins as legal and only then taxes can be collected on their use.

It is such a saddening thing to see a growth of a country in terms of Bitcoins and technology is being cut short because of some corrupt or uneducated leaders who I am sure don't even realize how Bitcoins work and what is blockchain technology. I have a lot of respect for Indian users and members because I work with some and they are really down to earth and work on minimum wages and work their heart out for you.

This is all so wrong, and I'm actually glad I'm not living in India right now. Feeling very close to our fellow Indian bitcoiners because what's happening over there may well happen in so-called democracies: it's only about time you'll see.
Never lose grip on keeping an eye on what your government does because power tends to extend its hand over every aspect of their citizens life.
I know for some is hard to leave the country for a whole lot of reasons but for wealthy bitcoiners that's not an option anymore.

namaste

[bryant.coleman]

Some of the government lapdogs have now jumped into the fray. Rakesh Jhunjhunwala, regarded as one of the most well known equity investors in India have come up with a strange logic. He says that he don't like Bitcoin and therefore government should make it illegal. This Jhunjhunwala guy was earlier charged with insider trading and market manipulation, but due to his close bond with the ruling party, the investigation into these crimes were suspended.

https://economictimes.indiatimes.com/markets/stocks/news/indias-bitcoin-owners-get-sinking-feeling-as-jhunjhunwala-calls-for-its-ban/articleshow/81172933.cms

“I think regulators should step in and ban Bitcoin. I think it’s speculation of the highest order. I will never buy Bitcoin,” Jhunjhunwala, often referred to as India’s own Warren Buffett, told US business network CNBC in an interview.