Uncertainty in the regulatory environment coupled with government apathy has taken a toll on yet another cryptocurrency exchange in India. Despite a very enthusiastic response from many investors, the story of digital coins in India never really took off. Suffering the losses for quite some time now, many cryptocurrency exchanges operating in the country have already shut their shop – the latest one to join the fray is Coinome. Just so you know, Coinome has got the support of Billdesk a well-known name in the online payment gateway having a strong presence in the market.
According to the latest information published by the Coinome on Thursday, the company has informed that it is stopping its operations with effect from May 15, 2019. It is yet to be known whether this shutdown is temporary or the company has decided to leave the Indian market altogether. There are a number of reasons behind this decision with most prominent ones include lack of institutional and regulatory clarity, absence of any proper legislative framework, and more importantly, the hard stance adopted by the Indian government towards digital coins. In September last year, Zebpay, the largest cryptocurrency exchange in the country, closed its Indian operations. Zebpay also cited similar reasons for its decision to wind up its operations. Following Zebpay, there came news of Coindelta (another cryptocurrency exchange) which pulled the plug on its operations in March earlier this year owing to its assessment that doing crypto business in India is financially infeasible.
Regulatory Agencies and Concerns
Reserve Bank of India (RBI), which is the central bank of the country, in April 2018 last year barred all the banks and financial institutions from dealing with any clients having cryptocurrency businesses. This served as a body blow to the crypto industry as this decision made these businesses pariah and their access to the funds or other financial facilities ceased to exist. In retaliation, the crypto community dragged Indian Government and RBI to the top court of the country, Supreme Court of India. The final hearing in this matter started in September last year, but till now, there is no clarity as the government agencies are inclined to buy more time rather than submitting any clear-cut facts to the Supreme Court.
In between, there was a ray of hope when the Government of India in 2017 constituted a high-level committee to look into the prospects of the cryptocurrency in the country. The committee had the representation from top regulatory authorities including RBI and Security and Exchange Board of India (SEBI) with a top bureaucrat, Subhash Chandra Garg was appointed the head of this high-level committee. It’s been over a year since this committee was formed, though, its report hasn’t been out now. Recently, rumors were doing rounds that the committee had recommended the Indian government to put a complete ban on cryptocurrency though this news was not confirmed yet. These speculations have certainly dampened the spirit of the cryptocurrency market, and although nothing is official about the ban yet, these rumors are proving good enough to send the whole crypto sector into a tizzy.