Cryptocurrencies represent one of the most popular trading assets in recent years, especially Bitcoin and several other options. Blockchain technology is an advanced background of these coins, and it allows them to be a safer option when compared to standard transaction services. There are many advantages of this system since it is decentralized, more affordable, and there is a great potential to earn a profit from investing in this market. The best example is BTC, which currently has a price of over $45,000, while its price was near ten times lower in the same period last year. Many countries are interested in implementing this system as a regular payment method. We can already find ATMs with blockchain support in many countries. However, according to some financial experts, the future of this market is still uncertain. You can visit Advfn to read more about the predictions related to the market of cryptocurrencies.
Besides the technical advantages of cryptocurrencies, the main reason why they are so popular is the fact that many of them have the potential to become much more valuable in the future. However, there are over 2,000 tokens and coins available on the market today, which means that you will need proper analyses to determine which one to choose for your investment. On the other side, the main issue with them is related to the fact that they are decentralized, and countries will need to find a way to implement the taxation system over them. Also, there are accusations that criminals and terrorist groups are using e-wallets for funding since it is completely anonymous. Because of them, some countries decided to make crypto trading illegal, with India being the leader in that banning process.
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Cryptocurrencies Are Currently Illegal in India
Source: pymnts.com
According to current official regulations, trading or possessing cryptocurrencies is not legal in this country. On the other hand, there are still online exchanges, but it is confusing how they still manage to operate. The main reason for this law is related to the taxation system. The Indian government is keen to find a way to include taxes in transactions with BTC and other virtual currencies. This country already has many issues with the black market, which made them even withdraw some banknotes from circulation. Moreover, they are still interested in blockchain technology, and there is a plan to introduce a fiat currency in digital format. Their plan is not only to prevent the trading but to make it completely illegal to possess an e-wallet with digital currencies. The latest law planned for 2024 states that you will be able to use only those currencies allowed by their central bank.
According to the most recent regulations, all private cryptocurrencies will be illegal. ON the other side, we are still not sure whether they will include BTC and other popular models in that regulation. There are many downsides to this law since the popularity of investing in this market has become quite popular in India in recent years, especially among younger people. According to some researches, there is over $1 billion worth of crypto in India.
What to Expect in the Future?
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While it is still uncertain about whether they will ban every model of blockchain currencies in the country, a lot of experts expect that they will change some parts of these regulations after they manage to implement the system where each person who is using an e-wallet will have to pay a tax during the process. There are many risks of banning crypto trading since it is getting more popular in the whole world. Even some of the biggest companies started accepting crypto as a regular payment method. Also, many investors are hoping that big companies from India might influence the government to allow people to use e-wallets. Currently, there are around 10 online exchanges.
Main Reasons for Ban
Source: financemagnates.com
The main reason why they decided to come up with this law is that cryptocurrencies are decentralized, and they already have issues with the black market and criminal organizations. Therefore, they will be interested in a model that can be controlled. Also, there were some cases where hackers managed to steal a lot of money from exchanges, and they are in fear that it could happen to them as well. Also, there is a popular misunderstanding where a lot of people think about how terrorists could use this system for funding. However, the fact is that you can track each transaction, but the owner can stay anonymous.
Conclusion
Besides India, China and some other countries are also less interested in accepting Bitcoin and most other models of digital currencies. They are in fear that this market could have a negative influence on their financial systems. However, the chances that the following law planned for 2024 which is going to forbid people in India to trade with cryptocurrencies will last for a long time is very low. Most countries are trying to find a way to implement this system and create a base where each user will have to pay taxes for these transactions. In case that most countries finalize that implementation, especially those highly-developed countries, India and others will be forced to do the same in the end.
Another factor that might force them to change their decision is related to the current economic and political situation on the global plan. The pandemic caused serious issues with the global economy, and there is a high chance that we will face another recession, even worse than the one in 2009. Therefore, investing in cryptocurrencies represents an excellent way to protect your assets.
There are many indications that this ban will only last for a short time, especially the fact that India is planning to introduce its model of cryptocurrency. If they manage to do that, there will probably be some changes on the market since they will have to include the possibility to convert their digital money into some other model with a blockchain background.