The rumors about the Indian government planning to put a blanket ban on cryptocurrencies finally turned out to be true. The official report along with the draft bill from the interministerial committee tasked at formulating the framework for crypto use was released on July 22, a day before the Supreme Court was scheduled to hear the crypto case.
The draft bill titled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019” proposes a complete ban on any kind of cryptocurrency even though the committee recommends the push for adopting blockchain and DLT. The draft bill was not well received by the Indian crypto community as most stakeholders have been constantly trying to convey the importance of crypto.
The chairman on the day of the official release of the report tweeted,
Committee is very receptive and supportive of distributed ledger technologies and recommends its widespread use in delivering financial services. It also opens up door for a possible official digital rupee. Private crypto currencies are of no real value. Rightly banned.
— Subhash Chandra Garg (@SecretaryDEA) July 22, 2019
Interestingly the recommendations in the bill dated back to February 28, and a lot has happened in the crypto space since then, especially the G20 summit where the FATF provided a regulatory guideline to help nations with their regulatory framework (which India was a part of).
Many crypto service providers and the majority of the Indian crypto community had voiced their concerns over a blanket ban and its downside. India would miss another big innovative transition as it did back in the late 90s during the Internet boom. However, at that time, India was not the global economic powerhouse it is today, given that it is one of the fastest-growing economies with the highest percentage of population under the age of 25.
Indian crypto-focused twitter handle Cryptokanoon recently posted a list of jobs that might be under threat if the government formed a law based on the same bill. The tweet read,
Crypto Ban will make 000's of:
????Coders????Content writers????YouTubers????Media Houses????Crypto Exchanges????Start Ups????Bloggers????Blockchain professionals????Community Managers????Digital Marketer????Legal Consultants????Event Managers
— Crypto Kanoon (@cryptokanoon) July 27, 2019
Sidharth Sogani, the CEO of CREBACO Global Inc, crypto and blockchain-centered analytical firm founded back in April 2018 commented on the post saying that India would lose around 84,000 crore INR which is approx $12.9 billion worth of market due to the proposed ban. AMBcrypto got in touch with Mr. Sogani to understand how they arrived at that figure.
Sogani told AMBcrypto that his firm went through a data which included several companies and the amount of revenue or turnover they generated or may have generated if crypto was deemed legal. He elaborated further that the likes of Indian crypto exchanges such as ZebPay, UNocoin, and several others collectively reached the trading volume amounting to 40,000 crores last year.
CREBACO also took into consideration several offshore crypto service-oriented companies which decided to operate outside India due to the banking ban imposed by RBI last year. These companies with Indian founders were traced back to several crypto hubs of the world like Malta, Singapore, the USA who made billions of dollars worth of turnover last year.
Sogani also quoted that data on the trading volume on Binance between Jan 2018 and Dec 2018 from Indian IPs amounted to a whopping 7.9%, which shows that the Indian crypto community is quite substantial.
As per the CREBACO research, the estimated revenue generated through crypto in India from various sectors include:The No of Companies dealing in crypto and blockchain which are incorporated overseas which have Indians on board as Directors, Founders, CTOs, CFOs, etc. are said to be around 93. Amount of revenue to be generated as per their whitepapers and business plans – 4.9 Billion No of expert Blockchain Coders – 3500 (Data from LinkedIn) Approx. Salary per project – $6,000 USD on avg age; total – $2.1 Billion Content Writers – 2650 (Data from LinkedIn) Approx. per article 100 USD x 4 = 400 x 12 = 4800 = 12,720,000 ($1.27Bn) Miscellaneous Job Opportunities (which includes Media Houses, Start-Ups, Bloggers, Blockchain professionals, lawyers, Cas, Event Managers, Rent, and others along with class 2 and class 3 executives and labors) – $4.5 Billion
Sogani, who was also part of the presentation team who appeared before the Garg committee to provide different aspects of the crypto use stated that he was quite surprised with the final outcome of the report that called for a complete ban,
“We have submitted several reports to the Indian governments as well and have consulted Ministry of Finance (MoF) through presentations and reports. In spite of all that, it was surprising to know the draft bill news.”
However, Sogani was still optimistic that the government would find a mid-way to regulate crypto; he stated:
“They will have to regulate it, because if they don’t, it will raise a question as how they will implement a ban on a population of 130 Crore people” Sogani said. “They dont seem to have the mechanics of doing that, given India is country of 1.3 billion people.”
As data indicates that a ban would prove more detrimental to innovations and various sectors that might thrive. The estimated revenue is too large to be ignored by the government in an industry which is relatively very new. The parliament would need to weigh in on the effect the draft bill would have on various sectors, while the Bill is brought up during the Winter session.