The Founder of the world’s largest Bitcoin exchange, Binance, ChangPeng Zhao, tweeted on Monday, “Banks refusing to work with cryptocurrency are like the bookstore refusing to work with the internet.” The comment came in the middle of confusion among different banking institutions like ICICI bank, other major banks, and the orders by the Supreme Court. As a result, these banks cut the payments and stop the payment gateway services related to cryptocurrency trades in India. In an interview, Chang Peng Zhao said, “the regulatory inconsistency and the lack of understanding among the Indian regulators are potentially eliminating multiple multi-million dollar trades in India.”
If a country reduces the amount of access to new technologically advanced systems, due to any reason, that country limits its growth and development slow down significantly. The USA is the source of over 50% of decentralized finances, and the reason is their positive and welcoming regulatory authorities understanding and foreseeing the future of trades and cryptocurrency. On the other hand, India is having one of the most technologically skilled but not much knowledge or potential for innovation.
The crypto traders have been increasing day-by-day and understanding the benefits of mining and farming cryptocurrency. However, banking in India sees a threat in promoting unregulated and decentralized financial processes that leads to such complications within the country and, in turn leading to losses worth millions dollars. India faces regulatory inconsistency that ultimately affects the ecosystem, which proves to be a hindrance in a co-existing and flourishing financial market.
Over 5-10 years, more than a dozen companies have crossed the $100 billion thresholds in the USA. The Cryptocurrency coin base in itself was over $100 billion on its NASDAQ debut. Those are huge parts of the economy and in a country like India with a population nearing 1400 million people, encouraging the trades and alternate decentralized finances can lead to a much healthier economy. On the other hand, ignoring cryptocurrency trades can negatively affect other industries that depend on financial services and will make these solely dependent on regulated and centralized financial channels. Institutions like Binance, which is the most used platform for trading cryptocurrencies, have many safety measures to prevent fraud and all illegal actions. They have antifraud and appropriate large compliance divisions similar to that of any banking or conventional e-commerce institution. These are an added advantage to the traditional digital financial institutions regulated and have a standard set of compliances. These factors depict that the regulatory authorities should reconsider their decisions on regulating and acting as a barrier to cryptocurrency trades.