Indian crypto exchanges are devising strategies to challenge and respond to the Reserve Bank of India’s order to prohibit banks from servicing businesses dealing in cryptocurrencies.What Sathvik Vishwanath Said, CEO of a leading Indian exchange Unocoin, read to find out more details.
Following the announcement by the Reserve Bank of India (RBI) last week, many crypto exchanges are reportedly looking to “move their head offices to jurisdictions outside India,” according to the Economic Times. The news outlet reported that among the exchanges considering moving overseas are Unocoin, Zebpay, Coinsecure, Buyucoin and Btcx India.
The central bank has mandated banks and payment gateways under its control to stop providing services to businesses dealing in cryptocurrencies. “This will impact nearly 50 lakh [5 million] Indians who have invested in cryptocurrencies, as well as India’s crypto exchanges,” the publication noted.
Vishwanath confirmed that:
“Banks have already sent notices to exchanges. But they have provided some breathing room as the mandate from RBI provides the banks itself about 3 months of time to end the relationships.”
Among the locations that exchanges are considering are Singapore, Delaware, and Belarus, the publication added. Shivam Thakral, the CEO of Buyucoin exchange, was quoted explaining, “We have to move our company to some foreign country where regulations allow opening of bank accounts plus we won’t be dealing in fiat currency. It will become a global operation rather than an India centric operation.”
As for Unocoin, Vishwanath described, “We do not have any solid plan for what we do want to do internationally yet.”
Grant Thornton Advisory director Riaz Thingna believes that “Indian investors may be able to continue to invest with the platforms through innovative structures” even if the exchanges move abroad. While expecting crypto trading volume from India to “surely go down,” she said “profits from businesses originating from India may escape tax in India as the exchanges would not have a permanent establishment in India after the move,” the news outlet conveyed.
Challenging RBI’s Decision
Money Control reported this week that some of the largest Indian crypto exchanges are also considering challenging RBI’s order in the Supreme Court. “Startups like Unocoin, Coinsecure and Zebpay have expressed their reservations with the order and going by the statements they are considering to mount a legal challenge in the Supreme Court,” the news outlet wrote. Coinsecure revealed that they are discussing the matter with industry stakeholders such as the Blockchain and Cryptocurrency Committee of India and the Internet and Mobile Association of India, the publication detailed.
“As a consortium, we will be attempting to challenge the order but this alone will not provide any relief to the industry due to delays and summer holidays associated.”
While Zebpay acknowledged that “sudden disruption in banking services could affect our ability to service deposits and withdrawals,” CEO Ajeet Khurana tweeted, “No way I am stopping. We will continue to do what is best for our customers, and what is best for our country. I am studying the present situation and will react shortly, and we will emerge stronger.”
“Every industry player is figuring out their own strategy but none of that info is there in the public domain yet. In our case, we will continue to operate the trading platform and exchange but we would need to tweak it a bit to adapt to the new regulatory stance.”