Cryptocurrency Restriction By Reserve Bank Takes Toll On Indians

RBI ban on crypto

Javal Halam is an Indian who makes a living off the internet. He works as a freelancer with some of the intermediary freelancing platforms that earn commission from freelancers and employers who hire them on the forum.

Getting jobs on these platforms is competitive but the interesting thing about it is that with time, a good persistent freelancer can have repeat customers as satisfied clients go back to the freelancer that worked for them previously.

However, one of the challenges Javal has is that with time, the employers decide to make payments directly to him. This way, they save money while Javal earns more because both parties would no longer need to pay the platform commission that adds up with time.

Javal had decided to start receiving his payments from clients in bitcoins in recent months. Things had really gone well until the Indian central bank, the Reserve Bank of India moved against crypto exchanges.

This has made it difficult to continue receiving payments from his clients in digital currencies such as bitcoins.

“I really liked being paid in bitcoins because it is convenient for me. I wouldn’t have to wait for a week to receive it as it happens with bank wire. Also the transaction fees are lower unlike my experience with other forms of payments such as Paypal”

javal said.

India has been one of the countries that was restricted by Paypal in the past but has since been supported by the platform giving many internet entrepreneurs a ready access to online payment.

However, like many other payment platforms, Paypal transaction cost can be quite substantial.  It is also tied with bank services unlike Bitcoin which gives the user a sort of autonomy. This is why people like Javal heaved a sigh of relief with Bitcoin and other cryptocurrencies coming on mainstream.

The relief the cryptocurrency revolution brought to Indians was short-lived. The RBI restriction on banks means that it will be difficult if not impossible to exchange cryptocurrencies to fiat in the country.

RBI ban on cryptoFor a third world country such as India whose population is among the world’s poorest. The impact of the restriction may not yet be known.

The RBI stance was not predicated on any known investigation on the impact of a decentralized monetary tool on the economy. This was revealed by Varun Sethi the founder of blockchainlawyer.

According to Sethi,

“The RBI specifically mentions that it conducted no research or consultation before the implementation of restriction in April. The RBI also responded that no committee was ever formed for analyzing the concept of blockchain before the decision,” 

The Indian cryptocurrency exchange community and other technical associations sent representations to RBI as well as filed a petition at the Supreme Court to bar the central bank from enforcing the restrictions but even this failed.

Debjani Ghosh, the president of National Association of Software and Services Companies ( NASSCOM), India’s premier IT body made it clear this week that digital currencies are not legal tender in India. She went further by saying that its use is not legal:

“It is the law of the land and hence, we have to work with it. If we do not agree, we have to go back to the government and speak about why cryptocurrencies aren’t correct [legal].”

As the regulators, court and exchanges strive to gain understanding of the viewpoint of one another. Indians like Javal are wondering why the crypto channel they considered a lifeline in terms of a quick reliable payment platform became the issue of contention.

 

 

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Author: Jofor Humani

Peddling words has been a passion beneath the surface. I speak less than I write...naturally. Aside speaking and writing, I walk too...good for your heart they say. I sometimes do not feel like writing. Then I enjoy quiet times which I use to think and stay with family.

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