How Indian Supreme Court Ruling Gave Cryptocurrency Trading A Boost
The mainstream adoption of the cryptocurrency has had its fair share of criticism and in the last two years, Asia’s 2nd most populous nation, India, has been at the centre of the saga. Crypto-related services in India received a ban in 2018 and this lingered for about two years until the nation’s supreme court stepped in and upturned the ban.
Has the apex court’s ruling given crypto trading a boost? Come along!
A Closer Look
In April of 2018, the Reserve Bank of India issued a ban on banks and financial intermediaries which prevented them from offering any sort of cryptocurrency-related services. The central bank argued that the situation surrounding virtual currencies (VCs) and crypto assets raised red flags with respect to overall market integrity, consumer protection, money laundering and other illegal occurrences.
The ban crippled crypto-related activities across India with several businesses and exchanges shifting their base to countries with favourable business regulations while a few others shut down. Afterwards, liquidity in India went from ‘100 to 0’ in no time at all; trade volumes dipped drastically from a whopping $60 million/day to less than 1% of the daily volume.
In some corners, experts branded the imposition as unconstitutional and beyond the jurisdictions of the central bank. Going forward, prominent stakeholders in the Indian crypto space took legal steps to upturn the ban in the supreme court. In March 2020, the Apex court struck down RBI’s directive and ruled in favour of the petition filed by the concerned stakeholders.
Upturned Ban - Crypto Trading Boost
During the period of the ban, India’s crypto sector was non-existent but after the ruling of the supreme court on March 4th, VC investors and related businesses have received a massive boost. India has now received the go-ahead to explore the cryptocurrency world and its promising technology.
In the aftermath of the ruling, the likes of Bitcoin and Ethereum are beginning to gain more mainstream adoption and activities on crypto exchanges have picked up progressively. CoinDCX, a crypto exchange, exemplifies the positivity of the court ruling having implemented the bank transfer feature and injecting $1.3 million into awareness and adoption campaigns.
Crypto trading volume on exchanges have spiked with Cashaa India, a cryptocurrency banking services platform, recording 800 percent increase in trading volume within 48 hours of the Supreme Court’s judgement. CoinDCX has also witnessed BTC/INR trade volumes go up by about 78 percent. Likewise, WazirX also recorded a 60 percent increase in trading volume; having received a total of $13 million (100 crore rupees).
In the coming months, India could experience an influx of exchanges with investors now more likely than ever to influence massive market liquidity. India could also experience a surge in new cryptocurrency projects which will see numerous start-ups emerge in the country’s digital currency space in the coming weeks.
More so, the reversal of the ban couldn’t have come at a better time; in the wake of the global pandemic which has dipped financial markets and retarded global growth. Trade volumes have increased most especially since the lockdown and this trend is expected to continue in the coming weeks.