Regulatory debates in India surrounding a cryptocurrency ban sparked panic selling on major crypto exchange WazirX, prompting a massive drop in the prices of major cryptocurrencies, such as Bitcoin (BTC) and Ether (ETH).
Cryptocurrency prices in India plummeted shortly after parliament announced the introduction and listing of 26 new bills in the Winter Session, which included the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. As Cointelegraph reported, The bill seeks a legislative vote on creating an official digital currency, while imposing a ban on “all private cryptocurrencies,” starting Monday.
A selloff on WazirX on Wednesday morning at 3:30 UTC sent the price of Bitcoin plummeting from nearly 4,600,000 Indian rupees ($ 61,820.73) to 3,917,659 rupees ($ 52,650.55), a drop of 14.8% in two hours.. Similarly, other popular tokens, such as Ether and Cardano (ADA), saw double-digit price depreciation locally on the exchange.
Speaking to Cointelegraph, WazirX CEO Nischal Shetty highlighted that The Indian cryptocurrency market tends to trade at a premium compared to the global marketl:
“This panic sales event has led the Indian market to correct and prices to reach global level.”
Shetty also pointed to the various use cases of cryptocurrencies as an asset or utility and cited the suggestion from former Indian Finance Secretary Subhash Chandra Garg that “there should be a ban on the use case of cryptocurrencies as ‘currency'”, If there is one.
Jay Hao, CEO of crypto exchange OKEx, told Cointelegraph the need for a detailed approach towards cryptoassets regulation in India:
“India is home to the largest number of crypto owners in the world, and the responsibility to protect the interest of a large number of crypto investors in the country rests with the government.”
Commenting on the cryptocurrency ban in India, BTC Markets CEO Caroline Bowler said: “This ban will not work in the long term and would be a setback“, adding that” banning is not an option to protect the interest of investors. “Bowler stated:
“The thing with cryptocurrency is that even though governments may try to ban it or try to contain it, the very decentralized nature of the technology in a way doesn’t allow it.”
As a final piece of advice to Indian inventors, Shetty believes in need to have faith in our legislators. “Do not panic”, he concluded.
This comes after a parliamentary discussion panel on cryptocurrencies on November 15, where a plurality of regulators concluded that while cryptocurrencies cannot be stopped, they should be more strongly regulated.
In August, a representative of the Reserve Bank of India said it had planned to start preliminary testing of a central bank digital currency before the end of 2021. India is currently one of the largest markets in the world, with more than 20 million crypto investors.