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FM’s push for ‘calibrated’ approach on crypto trading calms frayed nerves
Finance minister Nirmala Sitharaman’s statement that India will take a “calibrated" approach on crypto trading has calmed frayed nerves in the industry.
In an interview on Saturday, Sitharaman told CNBC TV18 that “negotiations and discussions" are on with the Reserve Bank of India (RBI) to regulate cryptocurrency.
“Obviously, RBI will be taking a call on what kind of official currency, cryptocurrency will have to be planned and how it has to be regulated," she said.
“The FM’s stance on ‘considering a calibrated approach’ is an encouraging sign. We are a 100-plus staff company with some of the best talents from premier institutes like IIT," said Sumit Gupta, founder of crypto exchange CoinDCX.
“We believe crypto as an asset has huge potential and, if properly administered, can help India earn sizeable revenue," he added.
The cryptocurrency industry has been urging the government to reconsider a possible blanket ban on crypto trading over the past month.
The issue began when the government’s plan to “create a facilitative framework for creation of the official digital currency" was announced in the agenda for the budget session of Parliament last month.
The bill is expected to “prohibit all private cryptocurrencies in India", a clause that led many to believe that dealing in bitcoin, ethereum and other crypto assets may become illegal.
“There have been positive developments around crypto. Ministry officials are taking a judicious approach to creating an inclusive regulatory framework. With the recent global developments, the government is of the opinion that a unilateral view of restricting it is not going to help, considering India is at the forefront of the fintech ecosystem. The industry is optimistic with the stance taken and would love to initiate dialogue with the government to resolve any issues,” said Gaurav Dahake, chief executive officer (CEO) of Bitbns, another crypto exchange.
Nishchal Shetty, founder of WazirX, the largest crypto exchange in India, pushed for innovation in the ecosystem via a tweet on Saturday.
“Our FM Nirmala Sitharaman has made it clear that India will compete globally in crypto," Shetty tweeted.
Despite fears of a ban, the cryptocurrency industry has seen increased trading volumes over the past month.
WazirX, on 4 March, announced it touched $2.4 billion in trading volumes in February, nearly double its January numbers.
Data from crypto tracking firm CoinGecko showed 24-hour trading volumes on WazirX and Zebpay stood at over ₹200 crore and ₹66 crore, respectively.
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JPMorgan Sends Its Private Clients a Primer on Crypto
JPMorgan has sent a report to its private banking clients to educate them on the risks and opportunities of investing in crypto.
The report, which was produced in February 2021 and obtained by CoinDesk Friday, has been distributed to clients of JPMorgan Private Bank, which requires a minimum balance of $10 million to open an account.
The comes after CNBC reported in February that JPMorgan co-president Daniel Pinto claimed “demand isn’t there yet” from clients for crypto services, but it “will be there at some point.”
The report breaks down how bitcoin could be valued, applying three different metrics: the number of users, the value of gold and the global money supply.
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If applying a version of Metcalfe’s law – that bitcoin’s value is proportional to the square of the number of users – it would be worth $21,667.
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If applying the current value of gold to the max supply of 21 million bitcoin, it would be valued at $540,814.
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Whereas applying the global value of money to bitcoin’s max supply would place the crypto’s valuation at $1.9 million.
Screenshot from JPMorgan’s educational deck on cryptocurrency. (JPMorgan Private Bank)