BUSINESS

‘Cryptocurrency ban could cost India dear’

No bar:People will trade cryptocurrency to cryptocurrencyeven if RBI cuts off the supply, says Akash Aggarwal.Reuters  

The Reserve Bank of India’s decision to bar banks and non-banking financial companies from having any links to firms or individuals dealing in cryptocurrencies could lead to millions, if not billions of dollars leaving the country, according to a cryptocurrency company looking to enter the Indian market later this year.

‘Approach is different’

“I totally agree with the concerns of the RBI, but their approach is somewhat different from what it should be, based on the actions of other regulators around the world,” Akash Aggarwal, founder and CEO of Alluma, said in an interview.

“But they have not said cryptocurrency is illegal, or that it is banned in India, or that you cannot trade in cryptocurrencies in India, and they have not told cryptocurrency exchanges to shut down. They are only scared of it touching the fiat currency, and are worried about money laundering and terrorism financing.”

“As per the RBI’s policy, a citizen of India is allowed to remit $250,000, which is Rs. 1.5 crore, and we are talking about nine million users in India,” Mr. Aggarwal added. “If people start sending money out of India just to trade cryptocurrencies, is the RBI or the government of India ready to lose those million or billions out of India?”

According to Mr. Aggarwal, Indians do trade extensively on international exchanges and will continue to do so even if the RBI cuts off their link to the fiat currency since it has not banned people from trading one cryptocurrency for another.

“Even if the RBI cuts off the fiat currency supply to the industry, people will trade cryptocurrency to cryptocurrency, which they have not banned,” he said, adding that this is primarily the service his company is looking to provide when it enters the Indian market.

“We will be launching in India, we are looking at the end of Q2, beginning of Q3 of this calendar year,” Mr. Aggarwal said. “So that’s the end of June or early July. We will be providing crypto to crypto trading, which is a large market in India. We will be coming out with some features that will seek to get people from trading on global exchanges onto our exchange.”