On April 5, 2018, a blow to bitcoin[1] occurred when the Reserve Bank of India (RBI) banned banks and regulated financial entities from dealing with cryptocurrency.
Despite the media report that 10 percent of Bitcoin transactions happen in India, the news does not come as a surprise, considering how the nation has clamped down on cryptocurrency regulation so far this year. Since 2013, the nation’s financial regulators have warned about the difficulties of controlling cryptocurrencies and, like most other stricter regulatory governments, preventing the new asset classes’ most nefarious use cases: money laundering and terrorist financing. [2][3]
The Indian regulators’ treatment of cryptocurrency is even less of a surprise when considering what they have done in the past to their own fiat currency, the Indian rupee. Back in 2016, the RBI announced the demonetization (stripping a currency of its value) of all ₹500 and ₹1,000 banknotes of the Indian rupee, stating the action would help crack down on murky shadow economy activity (counterfeiting, terrorism, etc.).
Based on this information, it’s not a stretch to assume that a seemingly anonymous and sovereignless computer currency should seem out of RBI’s monetary policy comfort zone. Taking the time to perform due diligence might also be a detracting task for a government that wants to maintain tight regulatory control but also has other, more politically crucial projects to execute.
India’s Other Political Projects
In a 2018 world economic report, the International Monetary Fund stated that Asia accounted for over half of the world’s economic growth within the last year; within Asia, India has been recognized as the fastest-growing nation.[4]
Another report indicated that to meet its accelerating growth, India has invested a record $18
