The regulatory stance on Bitcoin [BTC] and other cryptocurrencies continues to be in the grey area in India since the Reserve Bank of India [RBI] – the central bank, announced that virtual currencies are “not a legal tender” in the country. The country is well-known for being the largest democratic country in the world, with the term ‘Democracy’ defined as a government of the people, by the people and for the people.
The country has always taken pride in this, quoting that the people are the ultimate powerhouse driving the country forward. Since India is the seventh-largest country in the world and the second in terms of the population, it is quite difficult to have every single person participate in the decision that would either make or break the country. In order to solve this, the election mechanism was introduced, where an individual will have to elect a person who will be acting as their representative and make decisions that represent their ideology and the ones that would benefit the country.
However, in some scenarios, the regulatory bodies of the country decided to take the opposite path, with the RBI’s stance on Bitcoin [BTC] and other virtual currencies being a fine example. This move by the central bank stands against the very constitution the nation is built on and clips off an individuals freedom of choice.
In the month of April 2018, the Central Bank of India released a statement pertaining to virtual currencies. The bank stated that cryptocurrencies “raise concerns” of consumer protection, money laundering, and market integrity. They added that users active in the cryptocurrency space have been warned about the dangers associated with cryptocurrencies on several occasions.
“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time [3 months],” said the Central Bank of India
This announcement was followed by a huge uproar in the cryptocurrency community in India. This was mainly because of the action taken by the RBI without a solid ground to back it up with. It eventually resulted in the Central bank being dragged to the Supreme Court. Additionally, the bank was also criticized by the High Court of Delhi, remarking this action as “unconstitutional” and has ordered the bank to present the grounds on which it has prohibited other banks to provide services to individuals and business associated with cryptocurrencies.
The decision made by the RBI has a direct impact on the economy of the country. If the RBI had not taken this decision, cryptocurrency would have opened doors for more jobs, technological development in the country, and, importantly, monetary revolution. Since its the opposite, the ruling has resulted in several businesses tumbling in the market including Zebpay, a cryptocurrency exchange which was once a leading exchange platform in India.
The central bank that shut down one of the most-sought out means of participating in the cryptocurrency space now added the report by FSB on cryptocurrencies in their latest report, which states that they “may not currently pose systemic risks”. In a report the central bank said:
“The FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets. Its initial assessment is that crypto-assets do not pose risks to global financial stability currently. The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become more widely used or interconnected with the core of the regulated financial system.”
This effectively means that the central bank has thrown out the main reason it used to block the financial institutions support to everyone involved with Bitcoin [BTC] and other cryptocurrencies. Additionally, the Reserve Bank of India has still not disclosed the exact reasons for the action as ordered by the Delhi High Court.
This also contrary to the Prime Minister of India, Narendra Modi’s dream of ‘Digital India’. The movement was launched in the year of 2015 but rose to fame because of the 2016 demonetization. On November 8, 2016, at 20:15 IST, the PM of India announced that INR 500 and INR 1000 notes [two of the strongest denominations] would no longer be considered as a legal tender. The decision taken to cramp down corruption led to a major cash crunch in the country and also had a massive impact on the economy.
Because of all the inconvenience and distress caused by the movement, the dream of Digital India was sold to everyone in the country, and digital payments took the spotlight. This campaign is the very reason for the success of Paytm, a payment and digital wallet service provider in India.
At present, the fate of cryptocurrency lies in the hands of the Supreme Court of India. The court hearing on the same is scheduled for January 15, 2019.
76467|Ripple partner SBI Holdings announces foray into mining space; will compete with giants Nvidia and Bitmain
SBI Holdings, Inc. announced the establishment of its chip mining arm, the SBI Mining Chip Co., Ltd or SBIMC. With this development, the Tokyo-based firm will foray into the manufacturing of mining chips, a strategic move to enhance its existing digital asset business.
The official notice issued by the financial giant stated that the SBI Group practiced its digital asset mining business overseas, and now planned to diversify its potential business scope.
SBI group partnered with a US-based semiconductor firm to roll out the new manufacturing unit. The group, which is a strong advocate of a wide range of businesses based on blockchain elucidated,
“The SBI Group will promote efficient, reliable and sustainable mining operations to develop a sound and solid cryptocurrency market.”
SBIMC will be led by Adam Traidman, who was an investor in the company and also served at NASA previously. Among his many accomplishments, Traiman formerly served as the CEO in Chip Estimate and WearSens.
SBIMC will be leading chip manufacturer, Nvidia’s latest competitor. The Taiwan-based firm sustained losses during the crypto-winter, but it recovered after the recent acquisition of Mellanox, a semiconductor player. The Bitcoin mining giant, Nvidia, had predicted a bullish crypto market was confident of clearing its stockpiled mining equipment. The chipmaker was also reported as the worst performer in the S&P 500 list, at the end of 2018.
Another big rival in the mining ecosystem is Bitmain. The Beijing-based mining giant has also been operating poorly after registering a loss amounting to $500 million, owing to the massive crashes in cryptocurrency prices.
76216|Anthony Pompliano’s Morgan Creek Digital Capital makes strategic investment propagating mass crypto adoption
The cryptocurrency market was helped along in its pursuit of mass adoption, with many proponents of the space lending a helping hand. The latest news about the bigger players in the cryptoverse included the tie-up between Morgan Creek Digital Capital and Ikigai Asset Management.
The official release stated,
“Morgan Creek Digital announced today that it will be the lead anchor investor in Ikigai Asset Management’s flagship fund focused on executing systematic and fundamental liquid hedge fund strategies as well as opportunistic venture-stage crypto asset investments. Ikigai is a crypto asset management firm launched in December 2018 by former Point72 Portfolio Manager Travis Kling and partners Timothy Lewis, and Anthony Emtman.”
Morgan Creek Digital partner, Anthony Pompliano, is a voracious supporter of Bitcoin, and has held a bullish viewpoint about the world’s largest cryptocurrency. Post the partnership with Ikigai, Pompliano talked about the company’s positive devleopments, and claimed that they were well-positioned to capture the outstanding returns brought by cryptocurrencies in the coming future.
Ikigai Chief Investment Officer Travis Kling said,
“DLT and crypto assets are fundamentally changing our world. We are honored to receive this investment from Morgan Creek Digital and look forward to working closely together with Mark, Jason, and Pomp in this exciting arena.”
Pompliano recently sat down with Galaxy Digital’s Mike Novogratz to discuss elements like liquidity, trust and custody that need to be given a boost. Novogratz stated that the cryptocurrency market was presently a booming place of business, especially with the entry of companies like JP Morgan, Telegram and Facebook. He further claimed that it was a big opportunity to invest, with Wall Street sentiments changing. The Galaxy Digital CEO added,
“Wall street earlier thought that you shouldn’t take risks on something small like cryptocurrencies. They are getting close though, not doing anything but are getting really ready. We are anyway working hard on the security token business and I promise you this, the upcoming tokens and ICOs will be a lot bigger but less sexy.”
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