The shot may have been fired across the bow for bitcoin-as-currency just a few weeks ago. El Salvador became the first country to accept the marquee cryptocurrency Bitcoin as legal tender.
And bit by bit, other nations may be gradually opening up too, at least to the idea of Bitcoin and its brethren being used for trading within their borders.
China stands in stark contrast to that mindset, where a continuing crackdown on bitcoin and bitcoin mining is a strategy that seems bent on paving the way for the issuance of a central bank digital currency (CBDC).
Governments, like people, can change their minds, at least a bit. It may be the case that in India, lawmakers and regulators are softening a bit on Bitcoin.
The New Indian Express reported that Bitcoin may be classified as an asset class in that country “soon” and that legislation regulating cryptos may be forthcoming in the Monsoon session (which starts in July and runs into August).
Should that be the case, it would represent a significant turnaround from earlier stances that had been anticipated earlier in the year. As Reuters reported, the government had been moving toward proposing a law that would have banned trading or holding cryptos. At the beginning of the year, the newswire reported that the government agenda “called for banning private virtual currencies such as Bitcoin while building a framework for an official digital currency.”
The Times Are A-Changing
And now, in a sign that things are changing, consider the fact that Coinbase, a crypto exchange that went public earlier in the year, is seeking to build out its presence in India, hiring tech talent to do so with crypto offered as an incentive. Earlier this month, the company said it would offer $1,000 in crypto to help build a “high quality tech hub,” as noted in a blog post. The company also said it is exploring “startup acquisitions and acquihires” in India.
As for that incentive, the post stated, “we’re introducing a new program called CIkka — short for ‘Coinbase India Sikka’ — offering each new employee in India a one-time $1,000 in crypto when they start. Our expectation is that they’ll leverage this offering to learn about crypto and will use this knowledge to help us build the next generation of products that will delight our customers around the world.”
It might be the case that China’s move (which, depending on how you view the situation, might be prudent or draconian) might free up capital flows, talent and interest (and perhaps even mining?) to gravitate toward India for FinTech and crypto development.
Back in March, when the outright ban in India had been grabbing headlines, the Deccan Herald reported that, per Finance Minister Nirmala Sitharaman, “From our side, we are very clear that we are not shutting all options. We will allow certain windows for people to do experiments on the blockchain, bitcoins or cryptocurrency.”
Against that backdrop, we can surmise that it is the infrastructure, so to speak, that holds particular interest, where the eventual development of a national, digital coin could be streamlined a bit. It would also give the Indian government more control over how that digital rupee would be administered and used. An outright ban on cryptos and means of development would be rough sledding to get to that point.