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India’s Reserve Bank of India denies participating in the plot to ban cryptocurrencies

Arijit Sarkar



Cryptoverse questions India's stand on crypto ban following RBI's response
Credit: Wikimedia

Despite talk of India leading the tech revolution and the ‘Digital India’ campaign, the present government remains hesitant about embracing cryptospace. Consequentially, several crypto-businesses have either tasted the dust or found shelter in crypto-friendly countries such as Australia.

While there have been efforts online to bolster India’s hand in the cryptocurrency revolution, “Team blockchain lawyer” filed a Right to Information (RTI) application regarding the the proposal to ban cryptocurrencies on May 7, 2019. The application was based on a local news article that claimed that the government was considering a ban on cryptocurrencies. A similar application was previously filed by Coin Crunch. However, that did not receive any response.

Reserve Bank of India (RBI) has provided a written response to the recent RTI application, an update that was verbally shared on Team Blockchain’s YouTube channel. Shocking the entire Indian crypto community, the host read RBI’s response as,

“They (Reserve Bank of India) have not received any communication from any department nor have they given any communication to any government department pertaining to drafting of this bill.”

While RBI clarified its non-involvement in drafting crypto-related bills, the organization’s website has been proactively sending out preventive notifications toward crypto-assets for Indian investors. Some of the other departments within the Indian government such as Department of Economic Affairs (DEA) and the Central Board of Direct Taxation (CBTD) had previously endorsed the idea of “completely banning the sale purchase and issuance of all types of cryptocurrencies.”

Despite the RBI denying any involvement in drafting India’s crypto-bill, controversies around the crypto-ban are starting to stir. Following the news, WazirX CEO Nischal Shetty tweeted,

“RBI says it has no knowledge of any such bill about crypto ban. Is the bill even real or has there just been fake news being spread? 🤔

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Bitcoin is an enterprise; its users are comparable to traditional shareholders, claims Goldmoney Founder




Bitcoin: Age old discussion about Bitcoin being a commodity or security brought to life; Could it be a security?
Source: Unsplash

Bitcoin was conceived in the backdrop of banks bailouts and the 2008 financial crisis. The recession and the loss of faith in banking, financial institutions gave Bitcoin a platform to rescue the ones affected, giving them hope for a better financial system without the hassle of corrupt institutions. With the rise of Bitcoin’s fame, both in the darknet and in the mainstream, questions about its regulations had to arise.

The question was put to rest when the SEC/CFTC ruled Bitcoin as a commodity and taxed it. However, Goldmoney’s Roy Sebag brought this discussion up again recently in his tweet thread, where he said that Bitcoin as an enterprise is working towards its good, comparing its users to traditional “shareholders” among other things, while concluding that Bitcoin is a security. He tweeted,

“Is Bitcoin a security? <10 years old so regulators haven’t even had enough time to truly learn how it works (think Napster or Kazaa in early days). Miners are clearly issuing coins and responsible for governance, an absence of formal relations among them is irrelevant….”

In successive tweets, Sebag attributed miners with the role of “stewarding” the so-called enterprise. In return, these miners get paid in “direct fees” or in “share appreciation.” In Bitcoin’s case, it is the mining reward, which is “BTC”. Similarly, buyers are compared to “shareholders” with a common interest in the enterprise, i.e. profit. Sebag added,

“Coins trade at exchanges. The common enterprise is designed for the price appreciation of coin.”

Bitcoin could face a shutdown by the government, just like it did with big players in file sharing, said Sebag, who added that Bitcoin could also be interpreted as a security under the “34 act of the SEC.” The Goldmoney Founder concluded that “this realization rests on the belief that neither Bitcoin nor any common enterprise is truly decentralized.”

However, his inputs weren’t very well-received by many in the crypto-community. Casa’s CTO Jameson Lopp refuted Roy Sebag’s ideas, tweeting,

“Roy will believe what he wants to believe, though if he’s not actually participating in Bitcoin then his beliefs are irrelevant to its consensus formation.”

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