Regulatory discussions in India about banning cryptocurrencies sparked panic selling on major crypto exchange WazirX, which led to a sharp drop in the prices of leading cryptocurrencies including Bitcoin (BTC) and Ether (ETH).
Cryptocurrency prices in India collapsed shortly after Parliament announced the introduction and inclusion of 26 new bills during the winter session, including cryptocurrency and the official digital currency regulation bill of 2021. As Cointelegraph reported, the bill aims to vote on lawmakers to create a formal digital system coin at the same time as banning “all private cryptocurrencies” from November 29.
The massive sell-off on WazirX on the morning of November 24th at 03:30 UTC set the bitcoin price close to Rs. 4,600,000 ($61,820.73) in 3,917,659 rubles ($52,650.55), a decrease of -14.8% in two hours. Likewise, other popular tokens, including Ether and Cardano (ADA), have seen double-digit price drops on the local exchange.
Bitcoin price drop on WazirX. Source: WazirX
In his letter to Cointelegraph, WazirX CEO Nishal Shetty confirmed that the Indian cryptocurrency market typically trades at a premium to the global market:
“This panic selling incident has led the Indian market to correct itself and bring prices to global levels.”
Shetty also referred to the various uses of cryptocurrencies as an asset or instrument, and quoted former Indian Finance Minister Subhash Chandra Garg’s suggestion that “cryptocurrencies should be banned,” if any.
Jay Howe, CEO of crypto exchange OKEx, told Cointelegraph about the need for a careful approach to regulating cryptocurrencies in India:
“India is home to the largest number of cryptocurrency holders in the world and the government is responsible for protecting the interests of the large number of cryptocurrency investors in the country.”
Commenting on the Indian ban on cryptocurrencies, BTC Markets CEO Caroline Bowler said, “This ban will not work in the long term and will be a step backwards,” adding that “a ban is not an option to protect the interests of investors.” Bowler stated:
“The point of cryptocurrency is that even if governments try to ban it or try to restrict it, the decentralized nature of the technology blocks it.”
As a last piece of advice for Indian inventors, Shetty believes in believing in our legislators. “Let’s not panic,” he concluded.
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This came after a parliamentary debate on cryptocurrency on November 15, in which a number of regulators concluded that even if the cryptocurrency is not stopped, it should be regulated more strictly.
In August, a spokesperson for the Reserve Bank of India said that it plans to launch initial trials of a central bank digital currency by the end of 2021. India is currently one of the largest markets in the world with more than 20 million crypto investors.
