Regulatory discussions in India related to a possible crypto ban resulted in a panicked sell-off on the large cryptocurrency exchange WazirX, causing a huge price plunge for major assets, including Bitcoin (BTC) and Ether (ETH. ).
Crypto prices in India took a hit when parliament announced it would introduce 26 new laws in its winter session, including the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. As Cointelegraph reported, the bill aims to a legislative vote on the creation of an official digital currency and at the same time imposes a ban on “all private cryptocurrencies,” from Monday.
At 04:30 on Wednesday, a massive sell-off on WazirX pushed the price of Bitcoin from nearly 4,600,000 Indian rupees ($ 61,820.73) to 3,917,659 rupees ($ 52,650.55), a drop of 14 , 8% within two hours. Likewise, other popular tokens, including Ether and Cardano (ADA), have suffered double-digit write-downs on the local exchange.
In a comment to Cointelegraph, WazirX CEO Nischal Shetty pointed out that the Indian crypto market usually presents a premium over prices in the global market:
“This panic selling event prompted the Indian market to correct itself and prices reached the global level.”
Furthermore, Shetty highlighted the various use cases of cryptocurrencies as an asset or utility, citing the suggestion of former Indian Finance Secretary Subhash Chandra Garg that, should the government introduce a ban on cryptocurrencies, “should ban the use case of cryptocurrencies as ‘currency’.“
Jay Hao, CEO of cryptocurrency exchange OKEx, explained to Cointelegraph the need for a sophisticated approach to crypto asset regulation in India:
“India has the highest number of crypto users in the world, and it is up to the government to protect the interests of a large number of crypto investors in the country.”
Commenting on the crypto ban in India, BTC Markets CEO Caroline Bowler said, “this ban will not work in the long term and would represent a step backwards,“Adding that”the ban is not an option to protect the interests of investors“:
“While governments may try to ban or try to contain cryptocurrencies, the decentralized nature of the technology itself prevents it.”
Indian blockchain investor Evan Luthra shared Bowler’s opinion, explaining to Cointelegraph that it is impossible for governments to restrict access to cryptocurrencies, “due to their design, it is impossible to do so.Citing the rapid development of infrastructure in El Salvador for mainstream Bitcoin adoption, the young entrepreneur believes that the Indian government will soon be forced to accept and deal with cryptocurrencies:
“It happened first with the public, then with the banks and now the government will also have to learn to deal with cryptocurrencies in a metaverse future.”
As a final piece of advice to Indian investors, Shetty believes it is necessary to trust the country’s lawmakers. “Don’t panic,”He concluded.
Related: Indian right-wing group proposes tougher crypto regulations
The announcement comes after a parliamentary debate on cryptocurrencies on November 15 in which many regulators concluded that while cryptocurrencies cannot be stopped, they should be more heavily regulated.
In August, a representative of the Reserve Bank of India indicated that the institution intends to start preliminary tests for a central bank digital currency by the end of 2021. India is currently one of the largest markets in the world with over 20 million. crypto investors.