Ripple isn’t worried about the cryptocurrency ban in India by the country’s central bank as they expect the ban to be lifted soon. The third largest cryptocurrency, Ripple is not very much concerned on the ban placed on cryptocurrencies by the Reserve Bank of India (RBI).
Reserve Bank of India placed the ban in April
The bank, which has been warning its citizens against cryptocurrency trading since 2013, took this decision in April. After issuing the warning on two occasions last year, RBI issued a new directive to ban all Indian banks from dealing with any cryptocurrency business.
The bank released a statement posted on its official website stated;
Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated with dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time. A circular in this regard is being issued separately.
The bank announced plans to create its own cryptocurrency after issuing the ban, stating;
Rapid changes in the landscape of the payments industry along with factors such as emergence of private digital tokens and the rising costs of managing fiat paper/metallic money have led central banks around the world to explore the option of introducing fiat digital currencies. While many central banks are still engaged in the debate, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency. The Report will be submitted by end-June 2018.
The decision was challenged by cryptocurrency enthusiasts in the country and it now seems that the central bank would soon reverse the ban.
RBI likely to reverse the ban
Ripple is confident that Basel 3 norms (international regulations for the banking sector) and a government panel report on cryptocurrencies would see the central bank reverse its decision and instead regulate the cryptocurrency market in India.
Ripple, which is one of the most popular cryptocurrencies in the country, is of the view that the RBI will soon allow banks and other financial institutions to offer services to cryptocurrency companies in the country.
The RBI recently admitted that it didn’t conduct any research before making the decision to ban cryptocurrencies in the countries. This admission was made when the RBI responded to an RTI query filed by Varun Sethi, a startup consultant, in a post published by The Economic Times. Sethi told;
The RBI specifically mentions that it conducted no research or consultation before the implementation of restriction in April. The RBI also responded that no committee was ever formed for analyzing the concept of blockchain before the decision,
Without proper research, the ban is expected to be lifted soon. TOI in its Friday report cited Ripple’s global head of infrastructure innovation Dilip Rao as saying that Ripple’s main target is to help both international and domestic remittance of fiat currencies and not to replace them. This function has made Ripple a favored coin amongst bankers and other financial institutions, unlike Bitcoin and others that seek to replace fiat currencies.
Ripple is becoming popular in India, with its blockchain now being used by the largest banks in the country cross-border remittance. Asides the RippleNet that these banks make use of, Ripple also offers, xRapid, a blockchain platform for banks powered by the XRP token.
Rao is of the belief that Ripple in its current state could be of benefit to apex banks as a substitute to the traditional payments systems which have been known to be vulnerable to hacks and other forms of cyber attacks.
There is a great regulatory comfort with RippleNet — particularly in the light of the Bank for International Settlements’ policy requiring central banks to have a backup for payment systems having non-similar technology.
Ripple continues to expand its services and has recently added Saudi Arabian Monetary Authority to its fold. This latest addition means that the number of financial institutions in the world using RippleNet is now more than a hundred.
Ethereum, not a security declares SEC, Ripple Still considers as such
The cryptocurrency world was very bullish yesterday after a top SEC official declared that Bitcoin and Ethereum are not securities. This led the prices of most cryptocurrencies to record gains instantly. However, the fate of Ripple is yet to be decided by the regulators.
Ripple and Ethereum have tagged as securities by the U.S regulators, with each of them defending its position. Ripple through its spokesperson Tom Channick stated “XRP does not give its owners an interest or stake in Ripple, and they are not paid dividends. XRP exists independent of Ripple, was created before the company and will exist after it.”
Now that Ethereum has been declared not a security, all attention would be focused on Ripple and the decision that the regulators would take regarding whether it is a security or not.