Today, on July 3rd, Supreme Court of India [SC] held the awaited hearing of Internet and Mobile Association of India [IMAI] v/s Reserve Bank of India [RBI]. As per the recent reports, SC has not granted a temporary stay and the effective date for banks to stop supporting cryptocurrency exchanges still stands the same, that is, July 5th, 2018.
We got in touch with Nischal Shetty the CEO of WazirX, an Indian cryptocurrency exchange, to know what their plans are post-July 5th and what their stand is on this issue.
Q. What is WazirX’s stand on today’s hearing?
This decision is a good thing because this was more of a request to get things done early. I guess they [Supreme court] want to club everything together and this is fine.
The other thing is RBI has to respond to the representation filed by Internet and Mobile Association of India [IMAI] and Wazirx is a part of this representation. This representation explains what is blockchain, cryptocurrency, the usefulness of cryptocurrencies, the other countries which have regulation in place for cryptocurrencies, and how India should do the same. It was submitted as a thorough document to the RBI. Now it is at the discretion of RBI to respond.
It was reported earlier that the RBI has not made any serious effort to completely study and understand cryptocurrencies before issuing the ban. This representation will help them understand what it is exactly. For all you know RBI will be affirmative after this since it’s difficult to ignore the fact that cryptocurrencies and blockchain are the future of finance and technology.
Q. As an exchange, what are your plans post July 5th, considering bank support will officially be terminated?
Now there will be an interim period where the banking process will get disrupted, and there might not be direct bank access. So what we, as an exchange launched a solution to this which is called WazirX P2P, a peer to peer transaction and we believe that this will help Indians investors to convert INR to crypto and crypto to INR, in the absence of direct banking channels.
At present, this is our solution since P2P is something which is logical and we have seen it work in India previously as well.
Q. How feasible is P2P for large-scale transactions?
It is feasible, it depends on how much can you transfer to another person on a given date. At the end of the day what you are doing is something similar to buying furniture or a second-hand car and transferring money for the same and this is perfectly feasible. One important thing is “cryptocurrencies are not illegal in India”.
The only issue is that the RBI has instructed banks to not provide accounts to “businesses that are dealing with cryptocurrencies”. Considering all that, nothing can stop an individual to buy or sell these currencies.
It might not be as smooth as bank transactions but all that said, before it was taking 30-20 minutes, now it might take 2-3 hours but it is possible.
Q. Are you expecting another panic selling on July 5th?
Panic selling will happen because not everybody knows about WazirX P2P. We are also spreading this across to make sure people know an alternative route exists.
Panic selling is a waste because next day they get to know it was not worth selling. So, the more people getting to know about P2P, the better, because if you look at it panic selling happens only India when actually outside the country, you can sell it at a better amount.
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