Regulatory debates in India around a blanket cryptocurrency ban caused a lot of panic selling on WazirX, a major crypto exchange in the country. This scenario resulted in a massive price drop for the leading cryptos, including Ether (ETH) and Bitcoin (BTC).
The token prices on WazirX were seen crashing after the announcement of a bill that might ban all private crypto.
After parliament made that announcement, crypto markets in the country tumbled. The legislators said that they would introduce and list 26 new bills in the Winter Session, including the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
Based on previous reports, the bill now seeks a legislative vote on creating official digital currencies while imposing an extensive ban on “all private cryptocurrencies,” starting on November 29.
A huge sell-off on WazirX on November 24, 2021 morning at 3:30 am UTC tanked the price of BTC from around 4,600,000 Indian rupees ($61,820.73) to 3,917,659 rupees ($52,650.55). That represents a steep plunge of 14.8% within two hours. Also, many other popular tokens like Cardano (ADA) and Ether (ETH) recorded double-digit losses locally on the crypto exchange.
While speaking to reporters, WazirX CEO Nischal Shetty mentioned that the Indian cryptocurrency sector normally trades at a premium when compared to the global markets:
“This event of panic selling has led the Indian market to correct and the prices to reach the global level.”
Shetty also highlighted the different use cases of cryptos as an asset or utility and quoted ex-Finance Secretary of India Subhash Chandra Garg’s suggestion that “there should be a prohibition on the ‘currency’ use case of crypto,” in case of any.Buy Crypto Now
Crypto In India Needs Regulation
The CEO of OKEx crypto exchange, Jay Hao, commented on the need for a nuanced approach toward regulating cryptocurrency assets in India:
“India is home to the highest number of crypto owners in the world, and the onus lies on the government to protect the interest of a large number of crypto investors in the country.”
BTC Markets CEO Caroline Bowler, while commenting on India’s cryptocurrency ban, stated:
“This ban won’t work in the long-term and would be a step backward. Banning is not an option to protect investor interest. The thing with cryptocurrency is that while governments may try to ban it or try to contain it, the much decentralized nature of the technology somewhat prohibits that.”
As a final word of caution to the Indian inventors, Shetty thinks that there is a need to have faith in the legislators. He concluded:
“Let’s not panic.”
This news comes after a parliamentary panel discussion on crypto on November 15 where a plurality of regulators concluded by saying that, even though cryptocurrency cannot be stopped, it needs to be regulated more extensively.
In August 2021, a representative from the Reserve Bank of India (RBI) stated that it planned to start initial trials for a central bank digital currency before the end of this year. India is one of the biggest markets in the world with more than 20 million cryptocurrency investors.