We can all agree that India’s ban on cryptocurrency purchases and trading in April of 2018 was questionable at best considering the welcoming approach of other jurisdictions at the time, such as Japan. The Reserve Bank of India’s (RBI) distaste for cryptocurrency is nothing new. In fact, the feud goes back 5 years or so, starting with a range of warnings against digital currencies––primarily bitcoin. Finance minister Arun Jaitley even went so far as to deny it as legal tender, explaining that the country does not and will not recognize cryptocurrency as a real currency. Ironically, even though cryptocurrency was seen as nothing short of a threat to India’s national bank, they continued to work on a digital asset of their own, which has recently been halted.
That being said, the criminalization of cryptocurrency in India let loose a domino effect in countries like the U.S., China, Japan, and South Korea––countries with otherwise liberal regulations. This unleashed a string of legislation to monitor trading activity more closely. Of course, this could’ve had less to do with India’s crypto ban and more to do with the extreme volatility of early 2018.
It’s been a long two years for Indian crypto enthusiasts with a lot of opposition and resistance against the crackdown. But finally, the Supreme Court of India came to a ruling. Crypto exchanges, startups, and projects, fought back and ultimately won the battle, with the Supreme Court coming to the conclusion that no significant damages to India’s banks occurred as a result of their involvement in the cryptocurrency space. Still, much of the bill remains up in the air, as the legality of cryptocurrency is still quite vulnerable.
What does this mean for Canadians? Well, the historic verdict influenced a 5% jump in BTC price, touching $9,000 for the first time in a month. The price then dropped considerably in the past week, losing more than 31.6% in value, 17% of it happening in an hour! It just goes to show how much world news affects us (and our portfolios). (See Prices here)
India, China, Japan, France, and Russia are all building their own stablecoins (backed by their country’s national currency) either through government-backed financial institutions or through banks with large amounts of “pull” in their respective parliaments. We talked briefly about the the domino effect that other countries, and their operations influence what we do.
Bank of Canada’s Digital Loonie May Be Coming
The Bank of Canada even mentioned that if stablecoins become more widespread, they’ll have no choice but to follow suit.
Alex Tapscott, public speaker, venture capital investor, and the author of a new book “Financial Services Revolution, How Blockchain is Transforming Money, Markets and Banking” thinks that the digital loonie is the possibility as “the Bank of Canada has said if commercial currency initiatives like Facebook’s Libra become more popular they will have no choice but to launch them. They shouldn’t wait for someone else to do it first. This is a once-in-a-generation opportunity for our central bank to show leadership in digital transformation.”
As of right now, Canada also doesn’t consider cryptocurrency to be legal tender. This carries with it a myriad of implications for Canadian traders and institutional investors. Even if Canada probably won’t see any serious crypto bans as India did, it’s worth noting that adverse legislative opinions can both shift the market and a country’s attitude towards crypto. Interestingly, even though cryptocurrency is not technically seen as legal tender in Canada, we still lead the crypto and blockchain space. The question is, where will 2020 take us in terms of legislation? Knowing Canada, it’ll most likely take us towards a more trustworthy and more secure market that works for everyone. Maybe then we will see the mainstream adoptions we’ve been waiting for.
Important Update from the Coinberry Team
The team at Coinberry is monitoring the development of the COVID-19 (Coronavirus) breakout closely. Please be assured that our operations are not impacted by the recent events and it’s business as usual at Coinberry.
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