Why India Should Not Ban Crypto? A Detailed Guide to Crypto Laws

Why India should not ban Crypto

Why is Crypto the Buzz Word?

Crypto has become a very popular word in the world of money and technology. There are many reasons for this. One of the main reasons is that crypto can be easily traded or converted into other types of money. Another important reason is the way its value has grown very fast in the last few years. Many people have made big profits, and this has attracted a lot of new investors.

But along with big profits, there are also risks. Many scams and frauds have taken place in the crypto world. Because of this, governments across the globe have started thinking about making rules for crypto. They want to regulate how it is traded and stop people from using it without control.

All these points together have made crypto a hot topic in the financial world.

What Problems Does Crypto Have?

Crypto sounds exciting, but it also has many problems. The biggest issue is that no government or central authority controls it. It runs on its own rules, and the value changes without outside control.

Since there are no checks, crypto can be used for things people want to hide from the government. For example, payments for illegal activities can be made using crypto, and the government will not even know. This makes it very hard for police or other agencies to track criminals.

Another problem is price control. A small group of people with large amounts of crypto can change its value whenever they want. We have already seen this happen many times. So, the price of crypto is very unstable and can move up and down very fast.

Why is Government So Skeptical About Crypto?

Governments are worried about crypto for many reasons. Some cryptos have grown so big in value that, when combined, they are worth more than the entire economy of some small countries. This is a huge risk. If a private currency becomes more powerful than a country’s money, it can create a serious problem for the economy.

Also, crypto is not regulated by anyone. Its value can rise or fall suddenly, depending on the market. If this happens, governments cannot protect the investors who lose money. Big investors can take advantage, while small investors may suffer.

Another problem is that crypto acts like another currency in the market. If too many people start using it, the country’s main money system can get disturbed. That is why governments may allow people to trade crypto as an asset, but they will not allow it to become an official currency.

In What Other Forms Do Transactions Happen, Apart From Crypto?

People have been doing money transactions outside of banks for ages. This is not new. Systems like Hawala, Hundi, and Sauda Chitthi have existed for centuries. These systems work outside banks and are not easily traceable.

For example, during India’s demonetization in 2016, people quickly found ways to convert old notes into new notes. Traders created their own system for those 15–20 days when new notes were not available.

There are also many paper-based transactions that avoid taxes. But in the end, those were still counted in Indian rupees, so the government could track their effect on the economy.

Crypto is different. It is a new form of currency that can move across countries without any government knowing. This makes it a much bigger concern compared to older parallel systems.

What is the Future of Crypto?

Crypto is built on a special technology called blockchain. This technology allows information to flow freely without being hacked or changed. The records are safe, even though they are open for everyone to see.

This makes blockchain useful in many areas other than money. It can be used for keeping land records, tax records, medical records, and even voting records. Since the data cannot be changed once stored, it is highly secure.

In the future, we may see blockchain being used in many parts of daily life, making systems more transparent and trustworthy.

What Benefits Does Crypto Have?

Crypto is not just about trading coins. It can be useful in many areas:

1. Fast payments and money transfers

2. Tracking supply chains

3. Creating and protecting digital identity

4. Sharing data safely

5. Digital voting

6. Real estate, land, and car ownership transfers

7. Storing data securely

8. Keeping medical records

9. Registering wills and inheritances

10. Securing personal information and  crypto assets

With new models like digital finance, crypto also allows peer-to-peer lending, art monetization (NFTs), and much more.

What Markets Can Be Explored With the Help of Crypto?

Blockchain technology opens many doors for both governments and businesses. It can help in managing data, creating new banking products, and offering secure financial systems.

Crypto has huge potential to change the way we handle money and data. It depends on how governments decide to regulate and use this technology in the coming years.

How to Regularize Crypto?

One of the biggest challenges is regulating crypto, as it does not have physical borders. Money can move across the world in seconds without government approval.

In India, crypto trading has been happening for more than 10 years. Even though the RBI banned banks from working with crypto exchanges in 2019, trading still continued through cash and peer-to-peer transfers.

To make crypto safe, governments need strong rules. For example, requiring proper KYC (Know Your Customer), controlling wallet transfers, and reporting in income tax filings.

Also, to use a blockchain, you need its native token or coin. This means transactions can only happen if the ecosystem is understood and managed well.

Types of Buying on Different Exchanges and Launchpads

1. Indian Exchanges – Platforms like WazirX, CoinDCX, and CoinSwitch allow people to buy crypto with Indian rupees through bank transfers or peer-to-peer trading.

2. Foreign Exchanges – Exchanges like Binance, KuCoin, and Gate.io allow users to trade internationally using credit cards or transferring crypto like USDT and BTC.

3. Decentralized Exchanges (DEX) – Platforms like Uniswap and PancakeSwap let people swap one crypto for another directly from their wallets. Fees are high here.

4. IDO (Initial DEX Offering) – Platforms like BSCPad let users buy new tokens by staking coins and participating in launch events.

5. ICO (Initial Coin Offering) – Projects sell their coins directly to investors before listing on exchanges.

6. P2P Trading – Person-to-person trading allows direct buying and selling of crypto with trust guaranteed by the platform.

Key Suggestions on How to Regularize It

1. Regulate international transfers through FEMA rules.

2. Make P2P trades above a limit reportable in tax filings.

3. Create a central exchange like NSE/BSE to handle all trades in India.

4. Ensure strong KYC and anti-fraud checks for new coins.

5. Report all wallet-to-wallet transfers in tax filings.

6. Have one main regulator under SEBI to monitor crypto.

Existing Problems in Trading

Currently, crypto prices vary a lot across different exchanges. This is because liquidity is different everywhere. To solve this, India could have one central exchange where all tokens are listed. This would make trading safer, easier, and more transparent.

Why India Should Not Ban Crypto?

Crypto is a growing technology with many uses. Banning it will not stop people from using it; they will simply find other ways. Instead of banning, the government should regulate crypto and create a safe environment for investors.

A regulated crypto system will protect people, reduce fraud, and allow India to benefit from new technology.

At CoinGabbar, we strongly believe that banning crypto is not the solution. A better path is to build clear rules and a secure environment where both investors and businesses can grow.