The cryptocurrency battle in India has moved into the spotlight. While the government appears to be in favor of a full bad on crypto currency transaction there is a least one group that is ready to go to the mat. India’s credit rating is beginning to improve, and it looks like several of the major credit rating agencies are holding their ratings stable. This comes despite some declining business sentiment in India.
Nasscom, a major Indian trade organization, appears to be fighting a battle against a complete ban of cryptocurrencies, which was recently proposed by a governmental panel in the country. According to a report by The Economic Times on July 30, Nasscom commented that this tact is not in the best interest of the Indian people. Nasscom claims that crypto projects can always be tested prior to launch. Nasscom also reportedly believes that banning crypto will only serve to push away legitimate businesses who are already pro-compliance. Nasscom does believe there is work to be done in terms of creating a regulatory framework to mitigate illegal activities.
While there is Not Ban, Operations are Closing
Despite there being no official ban on cryptocurrencies in India, Several of the exchanges have closed as the Reserve Bank of India has barred financial institutions in the country from offering services to crypto-related businesses. This compares to the United States were the Federal Reserve monitors and overseas many of the exchanges and wallets. The Securities and Exchange Commission in the United States overseas cryptocurrency futures. The RBI posted a report prohibiting banks from offering services to crypto-related firms was released in April 2018 and subsequently upheld by the country’s Supreme Court that May. This means there can be no online share trading of cryptocurrencies. In May 2019, the crypto exchange Coinome halted its services in India due to regulatory pressure.
The Indian government is now providing answers to questions presented in the upper house of the Parliament of India, with regard to cryptocurrencies. The government also confirmed that the report with the recommended crypto regulation has already been submitted by the intermenstrual committee tasked with drafting the regulation.
India’s Credit Rating is Looking Positive
India’s implied credit rating was unchanged across the major credit rating agencies at BBB/Baa2/BBB. Several quarters ago, India was facing downgrade risks to its BBB-/Baa2/BBB- ratings. Now, there is a chance that there will be some slight upgrades.
Business Sentiment is Sliding as Global Growth Drops
Indian business sentiment is also slipping. Business sentiment in India fell to its lowest level since June 2016, due to concerns over a contracting economy, government policies and water shortage, according to a survey conducted by IHS. The market data research company in its business outlook predicts softer economic activity which will be underpinned by the downward revisions of profit outlook, subdued hiring plans and relatively muted capital expenditure.