India’s cryptocurrency industry is bristling at constant delays
There might be little to do but wait impatiently, and push gently.
"We have got employees. There are jobs," said Nakul Dewan, legal counsel for nine Indian cryptocurrency exchanges. The Supreme Court decision on cryptocurrencies has been dragging on since May, he added.
India's cryptocurrency businesses are in limbo. A government announcement from April "ring-fenced" the industry by prohibiting the buying or selling of cryptocurrency through fiat, but cryptocurrency itself has never been illegal.
However, many officials have construed it as a ban on cryptocurrency since then.
The ring fencing was just meant to be a temporary decision though, and the Supreme Court asked the Reserve Bank of India – the instigators of the ring fencing – to present some clarity on regulations by May. They have not been responsive, and every new deadline has been pushed back time and time again.
One might be forgiven for thinking it was trying to starve out the fledgling industry rather then engage it on legal grounds. It might be working though, and several exchanges have taken matters into their own hands in various ways.
CoinRecoil, one of the instigators of the lawsuit against the Reserve Bank of India, went live with its exchange before a decision was reached, albeit only in a kind of preparatory beta phase, seemingly in anticipation of being a crypto to crypto exchange. It went off okayish, but it still needs to be cautious not to skirt the laws by mixing its fiat and crypto.
Others weren't so lucky. Unocoin installed a bitcoin ATM, but it was shut down within a week and the company's founders arrested. The excuse given was not that it violated the ring-fencing order, but that it was installed without permission.
Most others have been using a system of peer to peer transactions and cash in hand deals to bypass the spirit of the law without violating its letter, and so far it's been working. P2P bitcoin exchange WazirX is reporting 35% growth each month since the ban, said its founder.
But the industry is waiting for a decision to proceed.
The counsel for the Reserve Bank of India has said that the regulator is only trying to discourage the use of cryptocurrencies, and that the decision on cryptocurrencies must be passed on to the government as a policy decision. This would suggest further delays, and no clear answer in the near future.
However, the industry perhaps can't afford to wait for too long. The ring fencing order blindsided a once-thriving industry, and many projects in the process of launching were instead forced to wait for an interminable amount of time.
P2P transactions can't sustain it forever, but the arrest of Unocoins founders has spooked any exchanges thinking of pushing too hard.
For now, the industry at large can only wait.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA