No Matter the Regulatory Remarks, Indians Have Expressed their Support for Crypto-Investments 0 205

Ever since the start of 2019, the regulatory authorities in India have adopted a very strict and aggressive stance against cryptocurrencies. Whenever possible, the regulators in India have tried their best to take down cryptocurrencies.

One of the latest low-blows that the regulatory authorities gave to cryptocurrencies in India was the crypto-banning proposal submitted at the Indian Parliament by the Reserve Bank of India (RBI).

Despite all the pressure that the cryptocurrency industry has faced in India, it has still managed to grow tremendously big. The cryptocurrency industry in India is witnessing the highest investment rate compared to all previous years.

The stats show that in the last 12 months, the investments in the cryptocurrency industry in India have increased by 19,900%. The most surprising part is that the regulatory status of cryptocurrencies is still uncertain in India. At this point, no one really knows exactly where the cryptocurrency industry in India is headed.

Ever since the mid of 2020, many on-chain data analytics firms have been monitoring the growing cryptocurrency market in India. As per one of the top analytics firms Chainalysis, the cryptocurrencies investments have gained huge adoption in India since mid-2020.

Ever since the mid of 2020, the cryptocurrency industry has experienced parabolic growth in terms of investments in India. Since the mid of 2020, the cryptocurrency industry has experienced an all-time high in India and the number is still growing.

When looking at the exact figures, the situation becomes clearer as to how serious and widely adopted the crypto-verse is in India. According to figures, the cryptocurrency investment sector in India has grown from $200 million to $40 billion in a matter of just twelve months.

At present, more than 15 million investors in India are exposed to cryptocurrencies. The analysts are predicting that by the end of 2021, the active user count for cryptocurrencies in India would be doubled.

According to the analytical firms, the investment and user base figures could have been tremendously high in India given there were no regulatory uncertainties around cryptocurrencies in the country.

If the situation becomes clearer in India, then the expansion level of cryptocurrency adoption in the country could have been much higher than it is at present. The regulatory uncertainty in the country is still there as the Reserve Bank of India (RBI) is making all the efforts to top crypto-industry from growing in the country.

The RBI was previously found sending notices to local banks in the country to avoid dealing with cryptocurrency-related firms. This action was later ruled out by the Indian Supreme Court, stating that the RBI could not do it because cryptocurrencies are not illegal in the country.

 

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IMF Says Russia and Iran May Use Crypto Mining for Monetizing Energy 0 41

The April 2022Global Financial Stability Report of the IMF has highlighted the consequences of the ongoing Russian invasion of Ukraine. The document said that the role of the US dollar was bound to be affected because of the conflict, as it would lead to the introduction of central bank digital currencies (CBDCs) and the global financial system’s resiliency would also be put to a test. The climate transition goals could also be put at risk because of the priorities associated with energy security. Another issue that would have to be dealt with in the coming years by lawmakers is the ‘cryptoization’ which is likely to occur because emerging markets are experiencing a widespread use of crypto.

IMF cited an increase in crypto trading volumes seen after the introduction of sanctions on Russia to back their statement. This included the financial penalties that had been imposed by Western nations on Russia because of its military invasion. The report said that such cross-border transactions were increasing in the long-term, which means that there would be challenges when it comes to imposing sanctions and managing capital flow. The IMF noted that crypto transactions have increased in both Russia and Ukraine because of the capital restrictions that have been imposed.

However, it is important to note that there has been a fall in liquidity in centralized exchanges where the hryvnia and ruble trading pairs are concerned. Therefore, using crypto exchanges for making large transfers has become rather impractical due to reduced liquidity. But, the IMF admitted that users do have the option of evading some measures via the crypto ecosystem because the identity verification requirements are quite lax in this industry. Hence, the international organization said that blocking new deposits of ruble and freezing crypto assets meant that users could have shifted to non-complying or less transparent crypto platforms and service providers.

Experts at IMF believe that both Russia and Iran could circumvent their respective sanctions via crypto mining. The nations could use their energy resources for generating revenue via crypto mining outside of the traditional financial system. Currently, the countries have a limited share of crypto mining activities, but there is a possibility that it could be increased, considering the size of the mining industry. The IMF quoted estimates showing that almost 11% of the mining revenues of bitcoin could have gone to Russia, which was around $1.4 billion per month, while Iran’s share had been 3%.

Bank of England Says Crypto Assets have Financial Stability Risks 0 80

On Thursday, the Financial Policy Committee of the Bank of England disclosed that they are working on developing a regulatory framework for digital assets. The central bank also made a reference to the sanctions that have been imposed because of the war between Russia and Ukraine in the statements. Bureaucrats and financial regulatory authorities all over the world have become increasingly concerned in recent times that Russia could take advantage of crypto assets to bypass the economic sanctions that have been imposed. The press statement of the BOE said that it was unlikely for crypto assets to provide Russia with a feasible way to get around sanctions at a large scale for now, but there was a possibility they could do so.

Therefore, it is a must to ensure that there are effective public policy frameworksthat can accompany innovation in crypto assets for maintaining the integrity and trust in the financial system. The crypto economy has been highly criticized by some members of the Bank of England for quite a while. Last year in mid-November, Andrew Bailey, the Governor of the Bank of England, had expressed his concerns about the adoption of bitcoin as legal tender in El Salvador. Sir Jon Cunliffe, the deputy governor for financial stability for the central bank, said in the following month that prices of crypto assets could drop to zero.

On Thursday, the report of the FPC talked about financial stability. The committee of the central bank noted that the FPC is assessing the risks to the financial system’s stability and it has concluded that these are currently limited. This is because their size remains limited for now and they are not that connected with the wider financial system. However, the FPC said that if they continue to grow at the same pace, and if they become interconnected with the overall financial system, then these crypto assets could pose a risk to the stability of the financial system.

Since the conflict between Russia and Ukraine began, politicians and lawmakers all over the globe have been discussing, developing, or even proposing laws aimed at regulating and researching digital currencies. The FPC’s statements on Thursday show that the BOE wants to classify crypto assets in the same category as it does traditional financial assets. Not only does the FPC plan on developing a regulatory framework that would govern digital assets, it has also mentioned stablecoins.

The FPC said that a major stablecoin that does not have a reliable deposit guarantee could turn out to be a risk to the UK’s financial system. According to the committee, if they introduce a systemic stablecoin, which is backed through a deposit mad with a commercial bank, it would result in significant risks to the stability of the financial system. All of this talk about crypto has been brought forward because of the Russian-Ukraine conflict and the possibility of the former using cryptocurrencies to evade the tough economic sanctions that have been imposed by Western nations due to its actions.

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