India has big plans for crypto and it involves less of it
India, the world’s second-largest population, plans to introduce a bill banning all private cryptocurrencies aside from “certain exceptions”.
What’s the big deal? The world is split on cryptocurrency regulations — but many are starting to choose sides. India flip-flopped between banning crypto in 2018 to backtracking on the decision in 2020.
The redrafted bill shows more openness to crypto, proposing to:
- Treat crypto as a financial asset — banning its use as legal tender for payments.
- Ban crypto ads and solicitation from crypto firms.
The draft leaves many questions — but according to India Today, crypto trading is likely to continue under the new rules — restricting trading to specific exchanges and restricting who can create new cryptos.
India has plans to introduce its own central bank digital currency — expecting to present an outline of its proposal to parliament on Nov. 29.
Regulation spectrum: In 2021, China’s ban on crypto sent the crypto market down over 50% during the summer but India’s proposed regulations haven’t hit as hard. And other countries are taking different stances.
- The US is regulating certain parts of the crypto market differently — approving Bitcoin ETFs in 2021 but taking a cautious stance on stable coins.
- El Salvador made crypto an official currency, with Germany and Switzerland among the most crypto-friendly countries.
Research firm, Kalkine Group’s CEO expects India’s move to pressure other G20 countries to clarify their stance on crypto — which could lead to even more volatile moves to come.
Investors: The recent crypto moves show us two things…
- Correlation: Crypto is moving in a similar direction as other risky stocks, and according to Ava Trade, the correlation between the S&P 500 and Bitcoin increased to 0.33.
- Resilience: Despite China’s ban, the crypto market recovered to new highs within months — showing the resiliency of the young asset.