It will be very interesting to see where all of this goes. India is the only major country I am aware of that outright banned and outlawed Bitcoin and other cryptocurrencies. I think this situation is worse than the SEC in the US. Most countries who are aggressive have a clear motive which is “we want to regulate and tax cryptocurrency” but India has taken it a step farther which is alarming. What some regulators don’t seem to understand or care about is that this huge amount of money from both investors and exchanges can be moved in an instant. If it gets banned then people may just physically and virtually move outside of that jurisdiction and never return. Banning cryptocurrency may seem like an upside to central bankers, but with short-term gain. In fact I would argue that outlawing it will only make cryptocurrency gain in adoption and popularity. The only doomsday scenario that would possibly be effective is if all major governments banned cryptocurrency which I don’t see happening, as it is literally shooting yourself in the head financially. I think these sorts of decisions will be seen in the future, as being extremely silly, inline with those who wanted to kill eCommerce and digital media purchases in the 90’s and early 2000’s.
With that all said I really wonder if the law would uphold this ban which I think under any country’s laws would be found illegal. This is hard to say as India has recently invalidated some of its own notes. It may be ultimately found illegal but if I were any of these firms I would have moved away by now and consider returning once the legal issues have been sorted out. But with India’s economy being so vast and strong the firms in question have a lot to gain by remaining and pushing for the legal acceptance of cryptocurrency in India.
Another Crypto Firm Challenges India’s Bitcoin Banking Blockade
Coinbase just announced it will be supporting the trade of ERC20 tokens. A lot of times in the crypto world I look and shake my head and I just can’t stop with this one. I could see if Coinbase wanted to support actual currencies like Ripple, Lumens, Monero etc… those are reasonably safe currencies to invest in.
ICOs which are essentially crowdfunding/pseudo-stocks (depending on who you ask) are extremely risk and I would say about 90% of those are fraudulent in that they collect your coins and never intended to deliver anything. I think we can all agree at any rate that ICOs are extremely risky and HODLING may be as useful with those tokens as holding RIM stock.
Coinbase has a huge client base and is one of the easiest ways for people to get into cryptocurrency. However, they risk bringing regulatory wrath and also dampening new investors from coming in when they get burnt on these ICO scams.
It’s recently come to my attention that some people weren’t aware that Ethereum Smart Contracts or ERC20 tokens are not vetted, supported or approved by the Ethereum team in any way. This is huge issue of course and why I am so against smart contracts at the moment. Let’s get cryptocurrency as an infrastructure in terms of B2B,B2C,C2C etc… working fast, efficiently, securely and easily before biting off more than we can chew!
I am also at a loss as to how the Coinbase legal team approved this one? Did they run it by any counsel at all? I think if and when people lose massive amounts that Coinbase could be held liable regardless of waivers and disclaimers for losses in some of the huge ICO busts and scams to come. Especially when there are so many other avenues and stable currencies they could have directed their customers to.
I am fearful for the investors, for Coinbase and the cryptocurrency market as a whole but should these warnings go unheeded and “things go terribly wrong” then it would be a good, fresh start for the industry. Investors also need to do their diligence and exercise good understanding and judgement before making investment decisions.
It will be interesting to see where this leads but I would never recommend any friend or family member to invest in any Ethereum Based Token ICO and to stick with solid and real cryptocurrencies that solve the problems of today.
First of all bravo for Coinbase, with a lot at stake itself, for getting this issue right in the following quote:
There is so much uncertainty about the definition of a security and the scope of regulatory control that the market is being chilled. This is bad for everyone because the technology won’t stop — it will simply move overseas and we will miss out on the opportunity to cultivate the benefits in the U.S.
Much like I’ve been saying is that governments who are overly aggressive, ambiguous and don’t create a fair playing field for cryptocurrency and related companies will be sidelined. Cryptocurrency cannot be contained by borders anymore than the web could be. Naturally, I do agree certain practical laws and regulations should apply but the laws should be clear and easy to follow. If companies are essentially being threatened, raided and faced with uncertainty it hurts both the company and investors. Ultimately as I’ve said before it will drive these huge sums of money away to countries that treat cryptocurrency users, traders and companies well.
There are so many conflicting statements from governments around the world and multiple bodies in the US. It sometimes seems as if government officials and bankers who have a lot of input in these matters diverge on the matter. This is OK but it should not be reflected by creating an atmosphere of fear and confusion whether by design or by fluke.
We all see the market has been impacted significantly with nothing but negative press for cryptocurrency but I believe it will resolve on the upside as investors realize it isn’t going anywhere and no single government or bank can ever stop it. In fact I predict that the market may just start using more privacy and security based coins and trade them exclusively and directly for goods, bypassing fiat altogether. Ironically this is probably the last thing governments and banks want but this is where all of this action is heading towards in my opinion.