Indian Financial system is one of the most tightly regulated one in the world. Their cautious and conservative approach to Distributed Ledger Technology is understandable.
A government panel has called for a ban on cryptocurrencies and wants 10-year-jail for violations. It is not like the other option (read regulations) was not considered. The plan was initially in favor of just regulating cryptocurrencies. However, eventually, they recommended imposing a blanket ban on them.
If you have been following my blog you know that this is exactly what I predicted. In my blog for 29th June titled "When will Libra Launch in India?" I wrote about it clearly.
"Let me put on my predictor hat and say that Libra will be the third coin to launch in India - First will be the Indian government coin, then will be a coin wither by Reliance or Paytm to give an edge to an Indian player and then will come Libra.
This is the future of cryptocurrency in India."
I still stand by my prediction. If you look at the recommendations, the panel has suggested that the Government should issue an official government-backed digital currency in India, to function like banknotes, through the RBI. So, my first prediction that the Indian government digital coin will hit the market first seems to be on track.
For now, it is waiting and watching. As always there is a little confusion still left. Union minister of state for finance, Anurag Singh Thakur, has clarified that the government has not prohibited the use of cryptocurrencies in India.
The whole ban will be gone in the next 5 years. I see Modi government making an announcement either in the last budget of their second term, or wait for the first budget of the third term before opening it up for newer players but it is going to happen. The big question is - how much of the current cryptocurrency ecosystem will still be standing? Libra will change the world outlook on cryptocurrency, and how we deal with it, by then.