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India crypto ban is like banning internet, says former Coinbase CTO

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Former Coinbase chief technology officer Balaji Srinivasan thinks India’s impending cryptocurrency ban would be akin to banning the internet and could cost the country trillions of dollars in potential profits.

Speaking in an interview with The CapTable, Srinivasan said a blanket ban on Bitcoin (BTC) and other cryptocurrencies would simply redirect trade revenue to nearby Asian markets, amounting to a “trillion-dollar” mistake for India:

“It’s really important that the ban (India’s plan to ban owning, trading, mining or investing in cryptocurrency) should not go through. It would be a trillion-dollar mistake for India, without exaggeration.”

On Thursday, an anonymous senior Finance Ministry official told Bloomberg that the upcoming ban was very likely to occur, revealing that crypto holders will have three to six months to convert their funds back into legal tender.

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The Cryptocurrency and Regulation of Official Digital Currency Bill was introduced in late January, and it also lays the groundwork for an official digital currency issued and overseen by the Reserve Bank of India.

Now an angel investor and entrepreneur, Srinivasan suggested that India could end up 20% poorer than it otherwise would be over the next five years, should the ban go through. The former general partner at Andreessen Horowitz said that a cryptocurrency ban would effectively stop the “financial internet” from taking root in India:

“India could get 20% poorer from what it could have achieved over the five-year term. It is almost like banning the internet for 5 years. The losses add up a lot. […] It would be a reversal of economic liberalization in many ways. It would basically be banning the financial internet from entering the country. And it wouldn’t even achieve the desired objective.”

Although the ban targets all cryptocurrency holders, its effect on individuals could be less impactful than its effect on traders and businesses. With the use of cold storage wallets, and by retaining control of their own private keys, Indian citizens on the ground level could still potentially skirt any anti-crypto legislation but would naturally face difficulties when trying to cash out.

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Grayscale’s Top Executive Joins Robinhood as New Chief Compliance Officer

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Robinhood hires a new CCO, the chief compliance officer of Grayscale

Robinhood brokerage app has welcomed Benjamin Melnicki as a new Chief Compliance Officer, who is also the holder of the same position at Grayscale Investments. He joined Grayscale in early January this year.

At the moment, Robinhood’s cryptocurrency arm is facing scrutiny from financial regulators. Last year, Robinhood was a target of an investigation connected to anti money laundering and certain cybersecurity problems experiences by its crypto division.

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As reported by U.Today previously, later this year, the brokerage firm plans to roll out cryptocurrency wallets for its users. The trials of wallets will kick off in October and will allow customers to deposit and withdraw cryptocurrencies to addresses beyond Robinhood seamlessly.

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Average Aussie crypto portfolio grew 258% in FY 20-21, survey reveals

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The average portfolio size on Australian cryptocurrency exchange BTC Markets has grown from $577.65 (795.5 Australian dollars) to $2,069.16 (2849.5 AUD) in the financial year 2021, signaling a 258.2% increase in portfolio holdings, according to exchange data compiled by Statista on a recent BTC Markets survey.

Data on the survey shows that the average portfolio size of female and male investors in fiscal 20-21 on BTC Markets was $1,924.30 (2,650 AUD) and $2,214.03 (3,049 AUD), respectively. However, in 2020, the average portfolio size of female Aussie investors exceeded male investors slightly. 

Transaction data on the exchange also showed a pattern of growing investment demand with aging. Considering the data provided by BTC Market on Australia’s average initial investment, investors above 65 years old have invested roughly $3,158.03, the highest ofall demographics.

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Following an incremental reduction across the various age groups, the youngest cryptocurrency traders, ranging from 18 to 24 years, tend to make comparatively small investments, standing at $792.96 on average. While older Australian crypto investors outweigh the new generation in initial investment, the younger crowd shows comparatively more activity in terms of daily trades.

Resonating the findings above, a September report from financial comparison website Finder shows that one in six Australians own cryptocurrencies, amounting to $8 billion in total investment. The report suggests that, like many other users in advanced industrialized countries, Australians were increasingly viewing cryptocurrencies as a new asset class. 

According to Cointelegraph’s report on the matter, Bitcoin (BTC) is the most popular cryptocurrency for the Australian crypto market held by 9% of investors. Other popular investments include Ether (ETH), Dogecoin (DOGE) and Bitcoin Cash (BCH). The report showed that, despite the growth in crypto investments, a significant barrier to entry for Australians is the difficulty in understanding crypto and the risks related to volatility.

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Switzerland to Impose Anti-Money Laundering Rules on Crypto Providers: Report

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FINMA requires all cryptocurrency providers to step up their game and monitor whether criminals use digital assets in illicit transactions.

The Swiss Financial Market Supervisory Authority – FINMA – would reportedly require local digital asset providers to take additional steps in preventing criminals from employing cryptocurrencies. The watchdog would also turn its sight towards bitcoin ATMs as it believes that drug dealers often use these machines.

FINMA Targets Criminals Operating with Crypto

According to a Finews report, Switzerland’s financial regulator – the Swiss Financial Market Supervisory Authority or simply FINMA – would closely supervise local crypto providers as an attempt to clamp down on money-laundering transactions.

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Swiss platforms and brokers dealing with digital assets would have to enhance their monitoring efforts and observe if bad actors employ cryptocurrencies. The Bern-based watchdog believes the initiative is “urgently necessary,” stressing that criminals use the asset class even to fund terrorism acts.

FINMA also turned its attention towards bitcoin automated teller machines. According to the regulator, drug dealers frequently use such ATMs as payment systems. It is worth noting that Switzerland is a relatively small nation, but its 130 Bitcoin automated teller machines place it in the sixth position among the countries with the most stations.

FINMA also passed an anti-money laundering provision according to which it lowered the threshold for unidentified crypto purchases from 5,000 Swiss Francs (CHF) to 1,000 CHF (around $1,080). Or, in other words, all financial providers dealing with digital assets have to collect data on anyone initiating transactions that exceed this amount.

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UBS: Crypto Regulations Could Spell Trouble

One of the leading banks in Switzerland – UBS – recently shared its views on the hot topic of digital asset regulations as it indicated that implementing certain rules might negatively impact the market.

Furthermore, the bank warned its customers that regulatory crackdowns can pop the “bubble-like” crypto markets. The Swiss bank also labeled the asset class as “speculative” alerting that it could be dangerous for professional investors:

“While we can’t rule out future price gains in cryptos, we see this as a speculative market that poses significant risks to professional investors.”

On another note, though, when the cryptocurrency market was booming at the beginning of May, UBS demonstrated a different attitude. Back then, it intended to enable its wealthy customers to receive digital asset exposure later in 2021 through third-party vehicles.

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