With the increase in regulatory scrutiny and safeguards in the domestic market, coupled with a bearish sentiment across the globe, cryptocurrency trading in India has crashed to $10 million per day, just around 5% of the level it had hit during the boom period last year. The virtual currencies, which have been declared as illegal tender by the government, have seen many clampdowns by banks and various regulatory authorities, making traders wary of investing them. Shivam Thakral, founder and CEO of multi-cryptocurrency wallet and exchange BuyUcoin, told DNA Money that even though the value of trade in cryptocurrencies has gone down because of drop in prices, the number of traders has more or less remained the same. According to Thakral, recent times have seen trading whittle down to just $10 million per day from the peak of $200-odd per day when cryptocurrencies were flying high. "It has crashed not just in India but all around the world. It had peaked to $200-250 million per day last year (in India). Even though the level of trading has gone down, the number of traders has not gone down in the same proportion," he said. The cryptocurrencies have fallen in the risky category with the government taking a cautionary approach towards it. The revelation of the recent Punjab National Bank (PNB) fraud has also pushed the banks to put more checks and balances in place to avoid any untoward events. HDFC Bank has disallowed the use of plastic money or use of its accounts for trading in cryptocurrencies. Akshay Ananth, CEO of Easter Egg Pte Ltd which operates a blockchain technology-enabled gifting platform, said the move by one of the largest private banks will not impact trading on cryptocurrency exchanges in a major way as a very small percentage of trading in virtual money was done through credit or debit cards. According to Ananth, who is in the process of launching his own token soon, most exchanges have already tied up with other banks for these services. "The cryptocurrency company that I trade with was working with HDFC Bank. They already have a back-up plan. They have got another bank and have three-four other banks for these services. The kind of money and volume being transacted is so huge that these banks do not want to miss out the opportunity. They believe that as long as they are doing the know-your-customer (KYC) of individual and companies and have data of transactions in place, they can go ahead and help the companies," said Ananth. Sathvik Vishwanath, CEO and co-founder Unocoin, concurs. He said HDFC Bank's move will have a negligible impact on trading. "None of the exchanges in India are accepting payments through debit and credit cards. It will only impact those who are trying to buy bitcoins from other countries by using debit or credit cards." Vishwanath said in India people normally transact in cryptocurrency through National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) or Immediate Payment Service (IMPS). "People (in India) send the money to exchanges and withdraw from them through normal banking channels like NEFT, RTGS and IMPS." According to Ananth of Easter Eggs, websites like LocalBitcoins.com address the risk involved in such transactions by providing information on people interested in trading in cryptocurrency. "There is something called the LocalBitcoins.com, where you log in and select an area. It will tell you of people willing to sell or buy bitcoins and at what price. You can meet them in a coffee shop and deal in cash. You pay in cash and the transfer of the cryptocurrency to you will happen online in front of you," he said. Most of the players in cryptocurrency are expecting a recovery around June. "It (prices of cryptocurrencies) always falls in the month of January-February, sees a correction in March and again plummets in April. But June onwards there is a resurgence. So, a lot of people wait and hold, including me. I am off the exchange for some time, till it picks up again," said Ananth. Thakral also expects prices of virtual coins to bounce back. "By June, bitcoin price will be closer to $15,000." Today, it has crashed to less than $7,800 per unit. He also believes entrance of Reliance with Jio Coin may revolutionise the sector. "They (Reliance) are doing something on blockchain technology. With their background, they might come up with something good for the community. There will be a revolution in the sector," Thakral said. Ananth, who believes that virtual coins could not be termed as illegal till the government completely banned it, also feels that Reliance would change the cryptocurrency game and make the government "fall in line". "Anything that (Mukesh) Ambani (of Reliance) does or brings in is bound to be a hit. On one side you have the government establishments trying to curtail people into getting into cryptocurrency while on the other side you have the richest conglomerate trying to launch their own coin. Lot of people I know think that cryptocurrency has a future because Ambani is getting into it. The government will have to fall in line," he said. Ananth said that a lot would depend on what kind of virtual token – security or utility – Reliance launches. He is now waiting for Reliance to release the white paper, which is done before any initial coin offering (ICO), which will give him an insight into the potential of Jio Coin as virtual currency.
/ / Cryptocurrency trading plunges to $10 mn per day due to clampdowns, crash in global prices