INDIA WANTS TO EAT ITS CAKE AND HAVE IT, AS FINANCE MINISTER’S COMMENT SENDS CRYPTO MARKETS INTO ANOTHER TAILSPIN
The cryptocurrency world is no stranger to controversy and a never seeming to end rollercoaster rides. The year is still very young but the industry has already seen a few sparks ranging from the rallying of certain currencies like Ethereum to the confusing new of regulation or lack of that is predominantly emanating from the Far East.
As at the time of writing this the cryptocurrency market is in another tailspin as the latest comments of Indian Finance Minister Arun Jaitley has shaken the market as he was reported to have alluded to the possibility of an imminent crackdown on the industry within Indian territory. The minister in an annual budget speech for the year ahead was reported to have said that the Indian government is exploring the possibility of a clampdown on the industry as he repeated his comments from last year that his government does not recognize crypto assets as legal means of making payments.
This comes a few weeks after similar news from the world’s biggest Bitcoin mining country China said that it was considering a crackdown on the industrial mining outfits dotted across its remote regions, the only arm of the crypto world that has so far remained unscathed after a crackdown on ICOs and its centralized exchanges in the third quarter of 2017.
The crypto industry often shudders at any sign of potential trouble from governments, and largely remains sensitive to news of potential regulation or clampdown. As at the time of writing this the market has shed over $100 billion of its value from less than a week ago.
The Indian authorities have a bit of a reputation when it comes to sensitivity about money moving within its economy, especially when it includes international transfers. Up till date, sending money through Western Union from India to another country is all but impossible, as successive governments tend to lean to protectionist tendencies on the matter.
It would seem the government’s only grouse is with the potential of the crypto industry moving money without the supervision or taxation from the government, as the finance minister also said that the authorities are exploring the blockchain technology behind cryptocurrencies, with the plan o incorporate it in its financial systems which he says will usher in a new digital economy.
Despite the Indian government’s threats, experts, however, question the feasibility of effectively clamping down on an economy that is totally virtual and dissipated all over the planet with no single point of failure. The blockchain technology with which cryptocurrencies are built remains so far beyond the crackdown of governments due i=to this decentralization. A classic example is that of China which despite its crackdown on organized exchanges remains among the biggest markets for cryptocurrencies in general, as the trade in the digital assets merely morphed from being done on exchanges with offices and registrations, to peer-to-peer markets which are now responsible for hundreds of millions in trade of the commodities every day. It is no secret that most governments find cryptocurrencies suspicious, to say the least, but experts in the industry say that it would take nothing short of an absolute global consensus for any crackdown to have any effect whatsoever. And even then, there are those that are of the view that the industry has scored an unassailable lead on any clampdown, and the authorities will have to reach some compromise with the industry that will guarantee its independence while taxing visible parts of it, like the big exchanges, and already established ICO companies.
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