Will crypto gain in “currency” as an asset class since the payment option is no longer available?

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Aseem Gujar & Partha Sinha | TNN In 2016, when Hiten Malviya (29) first bought bitcoin, the virtual currency was worth less than $ 1,000. After an initial investment of Rs 40,000, Malviya had become a ‘crypto-millionaire’ within a year, with bitcoin’s value reaching $ 20,000 by the end of 2017. In 2018, Malviya, however, lost almost 80% of his net worth. as the price of bitcoin collapsed to $ 3,000. He couldn’t even access his assets due to an RBI ban on banks’ facilitation of crypto trade. “It was a difficult time not only financially but also socially. Crypto was seen as illegal, ”said Malviya. Crypto is still in a legal gray area, but it has become a domestic phenomenon amid the pandemic as the prospect of multi-bagger returns has drawn Indians towards highly volatile digital tokens. According to Reuters, up to 15 million Indians own crypto assets. The growing popularity of crypto caught the attention of policymakers earlier this year. Last month, the government announced it would introduce a bill to ban “private cryptocurrencies” while allowing “exceptions to promote the underlying technology” during the current session of parliament. The government’s cryptic announcement, however, scared off Indian investors and led to massive sales. Nishcal Shetty, CEO of Crypto Exchange, WazirX, said, “The Indian market was briefly trading 15-20% off the global market. The description of the bill being the same as in January had aroused fear among investors, ”he said. However, the month-long winter session of Parliament is due to end on Thursday and there is still no sign of the bill. To add to investor concerns, the RBI told its board last week that a complete crypto ban was needed because partial restrictions would not work. The national crypto industry, which includes unicorn startups, has been in talks with the government and FM Nirmala Sitharaman’s statement to Parliament in late November – that the government has no plans to recognize bitcoin as a “Currency” – conforms to industry demands. . “Crypto should be classified as an asset class. It’s regulated in many other countries as well, and most crypto use cases are an investment, not a payment, ”said Ashish Singhal, co-chair of industry body BACC. BuyUcoin crypto exchange CEO Shivam Thakral also said that “the industry has spoken out against any recognition of crypto as legal tender.” The government and the RBI find it difficult to accept privately issued currencies because they are not backed by collateral or commodities. The bill will be watched closely as the government’s definition of “private” crypto is unclear. Visit www.TimesDecrypt.com for more crypto updates

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