Implications of China's crypto crackdown | India Development Debate
The pboc has issued a statement in which it has clarified that all activity relating to cryptocurrency and all transactions relating to cryptocurrencies are illegal in china. In fact, overseas exchanges have also been banned from providing services to people in mainland china. As far as cryptocurrency is concerned, uh already china has said they will be shutting down cryptocurrency mining. They said this back in may, and the reasoning for that is because they think it consumes too much energy that too coal based energy, so will chinas moves in a sense set a template for other countries that are not clear about where they want to head. As far as cryptocurrencies are concerned, what are the implications of this to speak on this im joined today by nishal shetty, founder and ceo buzzy rex mitchell great to have you back on the show, tell us what you make of chinas moves. Of course, we know that the chinese government has been hammering crypto currencies for quite some time, so its not completely surprising, but do you think it sets a precedent of sorts um? You know youre right. This is not like the first time that uh youre hearing uh something negative around crypto from china. Its been happening for over, i think uh, three years now and uh. If you, if you look at the string of announcements, it seems like theyre going deeper and deeper into uh, cutting out any of the crypto usage in the country, um and im talking about uh decentralized, public blockchain, but at the same time, theyre also doubling down on Their own uh crypto, which is a cbdc, the central bank, digital currency, so uh, you know we should not um forget that this is the same country where also internet is regulated to a large extent control.
So i think for chinas strategy. It might really play well where they want to focus on their own uh, central bank, digital currency and, at the same time, they want to probably avoid any other. You know open source uh projects to be uh used in in the public domain um. I think at the same time, the other uh thing is uh. Possession is still not still okay, its just that the usage and uh. There were quite after the last ban report that came from china. There were quite a few uh exchanges and services out that were registered outside the country and they were still providing uh services to uh the people of china, and i think this uh this recent news has to do with more of those kind of businesses that are Registered outside the country, but still providing services to people inside china, i think those are going to be affected now with this sure, but you know lets lets, look at it from a wider context. Initial essentially um doing anything with crypto currencies. Holding trading uh is going to be illegal in the most populous nation in the world and they are doubling down on a cbdc, a central bank, digital currency, as you mentioned, which several central banks also want to do. What are its global implications of this kind of policy? Because there are many nations who are still not absolutely clear in what direction they will head vis a vis cryptocurrencies look, i think, uh its going to be.
You know um, probably two or three buckets that you can uh categorize uh countries into when it comes to crypto. The the first bucket is where there will be an outright ban, uh, meaning you know they dont want to get involved at all uh. The second bucket would be where um you know they would want to control it completely uh the entire experience of crypto and the third would be where they want to involve a public private partnership, and i think um countries like india, u.s eu europe uh most of The nation everything everyone over there, i think, theyre, all in the third bucket, which is a public private partnership, uh and weve, seen that happen with all of the technologies and uh most of the businesses that run in these nations. So i think thats, where most of the countries will be, but there will always be a few countries, and china is probably the biggest where they want to have more uh. More of a you know, government control on all of these uh innovations and uh probably take a controlled approach, but i dont think the rest of the world is going to take that approach. Yeah just talking about india in a bit of detail, you talked about which bucket you think india is in, which bucket? Would you like to see india in because uh? Currently the um, the reach of cryptocurrencies, is increasing? More and more people are coming on and investing its becoming easier for them, and you know they can do it for very small amounts every day.
The regulatory framework is still not clear and we do know that the central bank is not gung ho about crypto currencies and is keen on its own cbdc. So where do you see that path going? I think india would benefit immensely by taking the approach of a public private partnership where uh our central bank uh rbi, should definitely get into crypto and uh. You know cbdc will really help the whole payment infrastructure get even better than what it is today and at the same time, i think we should encourage a lot of uh innovations in the startup ecosystem in india around crypto, because that will attract a lot of one. Is capital investments into the startups in the country? Second, as it will uh allow a lot of new jobs to be created and also skill. Development will happen at a faster pace in this new technology. So i think a part. Public partnership and a public private partnership is going to work in indias favor, especially if you see the history of our software industry, its its really benefited when both the private sector and the government work together. So when are you hoping to have some clarity and does the lack of regulatory clarity hinder you in any way right now, initial or you just seeing more and more people come in on? In any case, look i think regulatory clarity will definitely be an advantage um and uh. You know it also helps to ensure that uh you, your your investors, are more confident about the sector and uh.
Anyone building in the sector is more confident with regulatory clarity, so we are definitely pushing for that. Having said that, uh india is probably not only the only nation which is not having regulations right now. Most of the major economies around the world are still dabbling with how to regulate this sector. I think its a good thing that our government has started talking about it. Uh started approaching this uh uh, subject and thats a great start, but it might take a few years before we get regulations in india before that. What we are looking for as an industry is guidelines. I think guidelines are easier and faster for the government to really release and i think some sort of guidelines that would help the industry would be a great welcome. I think in the immediate future. Absolutely any clarity will be welcome.