Cryptocurrency Boom In India Sees Launch Of Several New Exchanges

India sees a surge in new cryptocurrency exchanges after the country’s Supreme Court reversed a circular from its central bank banning cryptoassets. But, lawmakers in the country might be moving to ban cryptocurrencies via a law.

The Reserve Bank of India (RBI), through a circular, previously banned all financial institutions in the country from providing services to crypto exchanges, effectively shutting the means for them to survive. However, this crypto ban was repealed by India’s Supreme Court, the immediate effect of which was the legitimacy of crypto businesses.

Because of the reversed ruling, a number of crypto exchanges launched in India, including Tradehorn. In a statement, Tradehorn CEO Rahul Vinakiya said the company aims to service “new traders, who are absolutely new” to cryptocurrency and ultimately spread crypto awareness. Tradehorn plans to launch a mobile app soon.

Global exchanges like Binance and OKex have launched fiat on-ramps for Indian Rupees. Binance, the largest global crypto exchange by trade volume, partnered with WazirX (a Binance acquisition in 2019) to launch a fund aimed at sustaining blockchain development in the country. OKEx, on the other hand, partnered with Mumbai-based CoinDCX to launch leveraged futures in India.

However, even with the win, crypto companies found banks still do not want to do business with them. Thus, the companies petitioned for the RBI to establish clear regulations regarding crypto transactions.

But it seems uncertainty will remain in the Indian cryptocurrency scene for now. The country currently looks into banning cryptocurrencies altogether via a law, The Economic Times reported. This is different from the RBI’s circular, which the Supreme Court repealed. Currently in draft form, this law will ban and punish any direct or indirect use of cryptocurrency. Repeated offense will be punished with imprisonment from five to ten years.

The news sparked negative reactions online, with a commenter on the Economic Times' website saying regulation is better than prohibition, while another person questioned why India could not do what other countries, like the United States, do in regulating cryptocurrencies.

Nischal Shetty, founder of WazirX, argued the Economic Times article “combined 2 things together” that could lead people to believe the old draft (which contains the outright crypro ban) was being pushed.

The WazirX founder said he is confident the Indian government will not stop a booming sector.