China and India Intensifies Crypto Crackdown with New Regulations

Over the years, both the Chinese and Indian government have largely taken an antagonistic stance against the crypto industry, intensifying its crackdown on the nascent technology in an attempt repress its large-scale adoption, to the dismay of citizens looking to enter the crypto market. While the regions’ so-called “regulatory” measures have so far proved mostly futile, both governments remain adamant in taking more draconian steps to eradicate the budding industry.

More recently, China has announced that it is imposing more stringent regulations on crypto-related services as well as blockchain node operation, while Indian banks have so far stayed compliant with the central bank’s prevailing blanket ban, mandating financial institutions to withhold banking services from domestic crypto firms.

Earlier this month, China’s central internet regulator the Cyberspace Affairs Commission (CAC), has issued new regulations requiring blockchain-related firms to register with the government agency starting February 15. As CAC underscored, all companies involved in blockchain technology must disclose positive identification, on top of operating under the government’s purview and censorship. As soon as the new regulatory measure takes effect, the government will have total control over all blockchain nodes in the country while also gaining legal authority to govern domestic crypto miners and exchanges.

India, on the other hand, is quashing the domestic crypto industry through banking service restrictions, including blocking crypto exchanges from accessing their bank accounts while ordering financial institutions to refuse any transaction with crypto firms. As it would appear, this directive, initially implemented last year by the Reserve Bank of India, is being strictly observed, as recent reports indicate a number of bank accounts linked to crypto firms have now been frozen, while a number of new account holders are now being limited by banks from using their accounts for crypto investments. Furthermore, RBI governor Shaktikanta Das is also going so far as to urge the government to outlaw digital currencies in the country altogether.

While both respective governments have been desperately resorting to every possible means to stamp out the industry’s growth, such attempts have so far proved ineffective.

Despite the countries’ contrasting political and economic structures, both governments share the same extent of hostility towards the crypto industry, viewing digital assets as a threat to their state-backed fiats even though both territories are well-positioned to adopt the nascent technology, given its poverty-stricken nations.

Contrariwise, both China and India have lauded the technology behind digital currencies. While Chinese President Xi Jinping regarded blockchain as part of a “new generation of information technology,” Indian Finance Minister Arun Jaitley has previously disclosed plans of exploring “the use of blockchain technology for ushering in digital economy.”

While these two governments have embraced a more adaptive stance on blockchain technology, this may not necessarily translate to having a better understanding of the technology’s fundamental structure. China’s attempt to take central control of a technology that is by design decentralized clearly demonstrates this lack of knowledge. RBI’s banking restriction also poses a conflict with a number of Indian banks planning to adopt digital assets for cross border transactions.

Nevertheless, given both of the countries’ massive population and economy which, as it stands, remains two of the largest in the world, the nations’ impact on blockchain’s development is undeniable.