2019 has not been a very positive year for the blockchain and cryptocurrency industry. So much has happened this year within the industry, but the greatest impact to this sector seems to have come about as a result of hostile central banks and unfavorable regulations. These policies do not seem to be working well for the industry and, instead, they seem to have negatively affected the market around the world.
Cryptocurrencies in India
To start, the year began with authorities coming up with new policies and regulations which saw many big players in the market halt their services. We witnessed many layoffs and the shut down of cryptocurrency exchanges. A good case is in Mumbai. The cryptocurrency industry has had a negative year in India as a whole. In fact, it is easy to say that it is in India where the blockchain industry has experienced the most significant challenges. To make matters worse, experts say that they expect even more harsh conditions and regulations moving forward.
In addition, 2019 also saw a big shift, with many players joining the market, including Facebook and other global giants. As a result, it has created an environment where many countries have started to examine digital currencies and the blockchain technology behind it. They have also started to investigate self-regulation and global regulatory standards. While the initial effects of this have created a lot of uncertainty, experts expect a more positive environment in the future, although it may take some time.
Binance crypto exchange CEO, Changpeng Zhao, stated that governments across the world are taking the initiative to examine cryptocurrencies as well as blockchain technology. Many of them are also revising their regulations and standards towards these virtual currencies, which he believes will trigger the spread of public adoption, which will be positive for the industry. The Binance exchange recently acquired a local Indian exchange known as WazirX.
Despite the changes, last week, the Reserve Bank of India reiterated their stance on digital currencies. The central bank has made it clear that they are opposed to private digital currencies and in fact earlier this year, a panel led by Subash Chandra Garg, the former finance secretary, recommended making trading in cryptos in India illegal. On the flip side, the central bank has now started engaging with other central banks with regards to possibly creating a cryptocurrency for India itself.
Cryptocurrencies in China
Meanwhile, in China, they are also expected to launch their own digital currency and this is expected to take place in 2022. Interestingly, there are other countries, such as Malaysia, France, and Singapore, who are also testing virtual currencies.
Last month, the president of China, Xi Jinping, expressed his concerns about cryptocurrencies, while also stating his support of the blockchain technology behind it. According to the founder of Policy 4.0, a policy and regulatory advisory firm, Tanvi Ratna, he stated that if China launched its own crypto coin, then this would likely influence Indian regulatory strategies. He went on to say that regardless of the Indian government’s decisions, Indian startups are innovating in the space despite the limitations.
This was confirmed by Ramani Ramachandran, the CEO of ZPX, which is a Singapore based cryptocurrency firm, who stated that while regulations are being debated and formed on a government level, on the ground, there has been a big increase in the interest towards engineering innovations and crypto trading in India.
The fact is, a lot will depend on authorities across the world with reference to banning or allowing cryptocurrency trade, and these decisions are then also likely to influence the Indian government’s agenda. Until then and although there have been several policies affecting the cryptocurrency and blockchain industry in 2019, many governments and regulatory bodies are slowly learning, and there are hopes for a better environment in 2020.