Topic: Reserve Bank of India - Most confused financial entity right now! (Read 456 times)

I am from India and as per the ground reports it is not yet clear whether the government will go ahead with the blanket ban or not. They were initially planning to introduce the bill during the budget session, but that was postponed. Media outlets are reporting that the bill may be introduced during the monsoon session (4-5 months from now), but there is no clarity.

Irrespective of whether they are going ahead with this bill or not, cryptocurrency investors have already suffered losses. When the news first came out, Bitcoin rally was about to start. A lot of Indian investors sold their coins and thereby suffered losses. Now their losses are not going to be reimbursed, even if the government announces that they will not implement the ban on cryptocurrency.

They are novice in the system of governance and are traditional. They don't understand the system and are terming it to be bubble.

You have some understanding that these decisions are fuds to my knowledge to pull price down. During the last ATH and the drop, many politicians bought and this is what may happen  this time but unfortunately , the price may stay up there for long.

The price of bitcoin is high and difficult for investment, everybody including government officials want to invest that is why you get critism.

I agree that they are not completely safe. But the risk is not very high. There are 10 to 15 million cryptocurrency users in India and even earlier most of the users were dependent on these P2P platforms. Even previously the government had created issues with banking bans and all, so most of the users were not using the mainstream exchanges. For the government, it is not practical to track all these millions of people, although we can't discount that possibility completely.

This is a tendency that is going to keep growing whenever such restrictions are put in place, people are not going to stop doing something that is profitable and that does not harm anyone, using cash for their transactions confers them privacy but using those platforms or social media to contact their customers means that governments know where to look, I really think that people that are looking to exchange their bitcoin and other coins that way should eventually get out of those platforms in order to void detection by the authorities.

I am not sure if this works, but there is one thing these Indian companies can do.

1- Find a legal country for operations and find a trusted person there and ask him to register the company in his/her country.
2- Keep his name for the ownership but operate from India.
3- Since you are only workers and the boss is non-Indian resident, that should solve the problems.

So basically the share in the profit can be discussed and accordingly you can sign contracts with the owner who remains only for the "name". I don't know if this is illegal but I am just thinking of the possibilities.

CBDC coins can become successful if they are easy to use. So international merchants who were using fiat currency earlier (SWIFT transfers and all) may shift to using these coins, just because they are uncomplicated. But at the same time, it will be foolish to believe that fiat currency in any format will replace decentralized cryptocurrency. Coins such as BTC and ETH are there for a reason. And their biggest advantage is that they are decentralized. Once you make them centralized, all the advantage is lost.

Most likely at a crossroads between prioritizing the elite sector's needs and wants and the common people's necessities. They wouldn't be that 'confused' if it wasn't the case. Nonetheless if I were the one handling the RBI, I'd choose the betterment of my people rather than the 1% which can safely survive and hold on their own.

I don’t think all these countries trying to create cryptocurrency is ever going to work, the ones I have seen already were a total failure. Although I have seen the Chinese digital Yuan that was trending through out last year, but no one talks about it again, I wouldn’t be surprised if that one also turns out to be a total failure lol, that’s how it happens.

And then as for central banks that are banning Bitcoin and other cryptocurrencies, they are just making a mistake because for me I see it as a loss for them, since people will still continue to trade P2P, the only thing they are doing is to ban centralized exchanges and not really Bitcoin, because they can’t stop people from using Bitcoin.

There is an increase in vendors who trade with physical cash in Indian platforms. They find it safer when compared to bank transfers. It is still not 100% safe, as the income tax authorities may be monitoring these P2P platforms as well. Talked to some of my friends yesterday. They were checking the possibility of traveling to the GCC nations with a tourist visa, and doing the cryptocurrency trade there.

As I said governments control the fiat system so I am not surprised that they need to take all of those precautions if they still want to send or accept payments in their bank accounts, but those people can still take a step further, avoid using P2P platforms and try to connect directly to those that want to buy and sell bitcoin, and instead of using their bank accounts they can use cash, this is going to slow down their business even further but it is possible they will have to do that in order to stay afloat.

LOL. India's own Warren Buffett. Everything that the west does, we have to find a representation for that. Almost every hill-station in India will have a nickname resembling "Swiss of the East". We never want to take the initiative and actually use innovation until some precedence has been set.
The same is happening with the talk about this legislation. Indian entrepreneurs who put their time and effort into Bitcoin related products did not do so to see this day. It is hard to fathom that a good Govt. will do this to its own citizens. If this happens only because the crypto users are small in numbers, it'll be another one of sure signs of a failing democracy and the bankruptcy of ideas within ruling establishment.

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

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

^^^ 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.

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.

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.

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) 

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.

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.

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.

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.



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.

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"

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

They have an on and off relationship with bitcoin and I think that them becoming confused is a good thing because this means that their decision is not absolute. I know that governments and banks are afraid to give decentralization a chance but I can understand their perspective on the issue, they fear that it will undermine their presence because cryptocurrency gives the people the power to have a control over their finances, the longer they resist the change, the more they will endure pain.

I don't think that it is because of confused policymaking, but rather a coordinated attack on decentralised cryptos.

The RBI knows exactly what they are getting themselves into. They have made a conscious effort to oust a lot of their domestic corporations whom operated in the crypto space which means that they well and truly want to restrict access to prevent capital flight and for political purposes.

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.

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. 

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.

So that basically what happens, when a country confusingly banning bitcoin or cryptocurrencies in general or a certain financial body of it gives restrictions to everything related to crypto then suddenly will turn up a decision and will surprisingly goin to have their own crypto.

This is like the style of those known financial magnates that will say anything against bitcoin and then will suddenly turn and announce that they have bitcoin and likes to invest on it.

And on this case, there's little to no hope about RBI's action towards bitcoin.

This time I am not expecting any positive intervention from the Supreme Court. I have already posted about this. Back in 2020, we got a favorable ruling from the supreme court, because the RBI had banned Bitcoin without citing any law passed by the parliament. This time they are going to get the law passed by the parliament first, before going for the ban. Right now, our options are quite limited.

They can cry a lot about it, but in the end, they can never really ban Bitcoin or crypto or any coin at all. If they ban, there will be case on supreme court, they will fail to provide evidence of why they are banning and ultimately we will win, it's what happened in 2018-2020! Elon's influence is also a big thing, and am sure his positiveness towards crypto will influence our governments decisions as well because the government focuses much on digitalization and follows the west on a lots of matter!

If they really think that they will be able to replace decentralized cryptocurrencies with their own version of centralized shitcoin, then all the very best to them. One reason why cryptocurrency went up by so much during the recent times is due to the fact that central banks around the world have accelerated the printing of banknotes, giving the excuse of COVID 19. Ordinary citizens who want to protect their wealth from hyperinflation are rushing to convert some of their assets in to gold and Bitcoin, which are protected against inflation. Now the solution is not to ban the usage of these assets, but to tone down the uncontrolled printing of banknotes.

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?

The government has proposed their plan on banning bitcoin and other cryptocurrency as they have no idea on how to regulate them, that is what they said in the parliament as they do not consider bitcoin as a currency or an asset. The funny aspect is that these stupids does not even understand the meaning of asset.


The decision is clear, they want to control everything that is online and so is the reason they wanted to ban all decentralized currencies and promote their centralized shit coin.

It is not that they cannot understand, they do not want to understand, it is not on their best interest that people begin to use decentralized cryptocurrencies so on one hand they tell people that those currencies are banned but on the other they create their own, basically they are trying to deceive people and delay adoption until they figure out a way to stop cryptocurrencies, but they should already know by now they cannot kill bitcoin no matter what they do.

I do think that :
- The government is redirecting people towards the Digital Rupee.
- The government just wants to stay the dominant power , they do not want to give people the financial freedom
- They are too controlling and at the same time they think it would be extremely weird for the country to have such cryptocurrencies integrated in their own economy since it can go down anytime.. thus time and again they have generated warnings like that on the TV , newspapers etc.
( Makes me wonder why they did not  generate the same warnings for *stocks* )

Right now they just don't want to be left behind and they feel like banning cryptos might cause a lot of issues for the country even for the future and right now Zebpay is fighting them , lawyers are involved, people we tweeting ! We have different sites already available for supporting the cryptocurrencies in India , it's going very well though. I do think people would be able to make government realize their problems but I would encourage you guys to go and show them the support ! Let's use democracy !

They are just confusing people with their doubtful decisions. Last month I saw a crypto bank has been opened in India where exchanging BTC is possible. Now what happens with that and one of the biggest exchange wazrix is a product of Binance. We may saw some kind of regulation for these exchanges that are operating from India. But they allow or not the crypto market will flourish through the Indian economy.

They are making jokes by making digital coins centralized. But I still admit that they have their own market, namely the common people who always feel safe with inflation. LOL. Those who keep saving in the bank and think their money is fine. Even though its value has been lost to inflation. Crypto will continue to prosper in the future, it is very clear how many large companies are increasing the popularity of crypto significantly. I really don't care about the news of the central authorities starting to make crypto-related bans.

I don't think any country on earth can successfully prevent people from using cryptocurrency. They probably still don't understand crypto or know what they are talking about. You could comfortably use true cryptocurrency in any country on earth once its has been built in certain way that'll make censorship and confiscation of ones asset very difficult.
They have been so used to fiat that they fail to understand the potential of cryptocurrency.
You could use crypto comfortably and safely even in North Korea once it's been properly built.

That’s very common thing to see in India. Every time the politicians will drive this nation the way they want. It’s all about money for them. Then comes the winning of hearts for the purpose of elections. Then they “might” think about stuff like poverty, education, woman empowerment etc which are the hot topics nationwide.

So it’s very difficult that they will ever allow individuals to run their own finances. A saddest reality in here.


There is huge possibility for this act. Now that they have seen how richest people around the globe are accepting the crypto and benefiting from it, they will have secrete plot against bitcoin investors from the country. They dominate it by making centralised currency as you said.

However, i don’t think that Indians will fall for this honey trap. They will just switch to P2P platform and keep the stuff going on.

The leaders are simply going with the flow right now but in their own terms. They want to give the people the experience of this industry but also want to maintain control and thus, they act like they do now. if it weren't for the high spike and good news, they wouldn't even try to compromise. It is what it is, that's just how most of the governments and  banks are all over the world.

The rate at which government is turning U with cryptocurrency regulations is allarming, probably they are afraid of how bitcoin is making moves and they don't want their citizens to get quick rich and if that's the case, government are actually surrounded by shallow mind.
The same thing has happened in my country, the government want all financial institutions not to aid deposits and withdrawal into crypto exchanges.
There is always an alternative to every problem, simply use P2P.

RBI is not an independent body and the current RBI governor (Shaktikanta Das) is considered as a puppet of the ruling politicians. A few years back, RBI had a very independent governor in Raghuram Rajan, but he resigned due to differences within the government (even he was hostile to the idea of cryptocurrencies). The current governor doesn't have any opinion of his own. His opinions are the same as that of his masters.

Now there are two reasons why the government is coming up with this proposal to ban Bitcoins. First of all, they believe that if they can eradicate the competition, then the businessmen who are linked to the ruling party will be able to promote their own coins and profit from that move. And secondly, they are not comfortable with the idea of the citizens having a store of value as opposed to the highly inflationary national currency.

So with the new budget 2021, RBI has put forth an agenda (one more time) to ban the crypto currency across India. They won’t be allowing to use the crypto either for corporates or individual level. All the banks will be warned soon with the following guidelines.

Why confused?

Statistically they have already published such guidelines back in 2018. After this market crashed a bit and major exchanger like Zebpay was closed.

With Musk putting and publishing his actions with bitcoin (to buy TessaTesla with bitcoin) Indian government looks completely distorted with their decisions.

A draft of these guidelines states all the above junks.

Moreover, RBI to launch their own crypto currency which will be centralised one. 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

Reference: RBI to ban crypto currency use