India is taking steps to ban cryptocurrencies trading. The proposed ‘’Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019” is now in full motion. Nonetheless, innovation still continues to grow in spite of the prevailing circumstances and will continue to do so.
India’s ban on cryptocurrencies is similar to Thailand and China which have bans on trading. Initially, there was concern about the scope of the bill. This is because of reports on a ten year jail sentence for trading in crypto. This is not factual and will not be part of the legislation.
This proposal intends to bring crypto trading to a halt in the country. Many countries across the globe are trying to put in place harsher regulations on crypto. The official line is that cryptocurrencies are volatile and operate as unregulated securities. However, the fact remains that were governments able to control cryptocurrencies they would probably not be too eager to restrict them.
India already has one of the most exciting crypto innovation populations in the world. This is because the country has many blockchain developers who come up with new projects regularly. Moreover, the sheer size of India’s population makes it a great market for virtual currencies.
That said, the Reserve Bank of India says it is not involved in the push to ban crypto. This is despite a report in the Economic times that high-level government officials and institutions are part of the campaign.
Why Banning Crypto Won’t Work
Banning crypto is a straight up exercise in futility. This is because cryptocurrency by its very nature is impossible to fully control. The decentralized nature of Blockchain technology makes it immutable, even from government agencies.
In contrast, websites and other domains run on single servers or URL or IP addresses. Blockchain relies on multiple nodes which can be owned by anyone spread across the world. As such, you can’t simply attack a blockchain network by shutting down a central point. Therefore, banning may make a tad bit more difficult for Indian traders but will not prevent them from owing crypto or using blockchain technology to create apps.
The blockchain is essentially a peer-to-peer network similar to the torrent protocol. This means that participants in the network don’t need centralized approval to conduct transactions. Therefore, there is no way the government can block a transaction on the distributed ledger.
On the other hand, black market trading will continue unabated. This makes the regulatory measures only affect established exchanges and not much else.
Innovation Using Blockchain
The blockchain is one of the most exciting technological breakthroughs in recent decades. Initially, some thought the use of this technology was limited to crypto. Through the years, blockchain technology has turned out to be extremely versatile because of smart contracts.
This fact makes blockchain ideal for innovators developers to work on all manner of projects. The promise permissionless coding will continue to resonate with Indian developers regardless of stricter regulations.
Accordingly, blockchain technology will continue to empower a generation regardless of the regulatory landscape in place. This technology is fundamentally sound and self-sustaining. This means that crypto still has a solid future in India whether the government is on board or not.