Global crypto meltdown: India dodges bullet thanks to cautious government, RBI
Cryptocurrency markets worldwide have been battered with billions of dollars being wiped out but India managed to stay relatively unscathed thanks to a cautious approach of the government and the RBI.
While the Reserve Bank of India (RBI) has refused to recognise cryptocurrencies and repeatedly issued warnings against trading in them, the government fired the tax bullet to wean off demand.
Net result - Indian investors have been largely spared from the crypto meltdown that has taken the total market value of cryptocurrencies below USD 1 trillion in just a year from USD 3 trillion in 2021 and sent Bahamas-based crypto exchange FTX into bankruptcy after a rush of customer withdrawals.
The collapse of FTX empire, which has wiped out the entire USD 16 billion fortune of co-founder Sam Bankman-Fried - one of history's greatest-ever destructions of wealth, has shaken confidence in the already troubled industry that was struggling to gain mainstream credibility. The prices of the leading cryptocurrencies, Bitcoin and Ether, have plummeted.
In India, the RBI has been resolutely opposing virtual currency from day one while the government initially was toying with the idea of regulating such instruments by bringing a law.
However, the government after a lot of deliberation came to the conclusion that global consensus is required in respect of virtual currencies as these are borderless and risks involved are far too high.
According to the RBI, cryptocurrencies have specifically been developed to bypass the regulated financial system and this should be reason enough to treat them with caution.
Industry estimates put exposure of Indian investors to crypto assets at only 3 per cent.
Despite the global meltdown, India-focused cryptocurrency
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