The world was taken over a by a storm with a new form of financial system back in 2008 when Bitcoin manifested out of the ‘digital void.’ Since then, nothing has ever been quite the same.
While Bitcoin continues to soar at all-time high levels after breaking resistance in 2020, other cryptrocurrencies such as Ethereum, Litecoin or even the Dogecoin have managed to inflate in its supposed ‘intrinsic’ value.
Meanwhile, notable banks have even adopted the cryptocurrency blockchain technology. For instance Barclays, Germany’s SolarisBank or even Goldman Sachs are some of the major names that have adopted into the digital currency system offering exchange, trade and investing options for customers through distinctive cryptocurrency portfolios that they have accepted into their functions.
But all is not well when it comes to this “decentralized” and rather “stateless” financial system and there are several reasons why.
Quite recently, the South-Asian giant and one of the closest allies of Maldives, India made it apparent about the country state’s distrust on cryptocurrency transactions. The Reserve Bank of India (RBI) on April 2018 had issued out a circular giving stern instructions to the banks to ensure banking services were disallowed for customers “dealing in cryptocurrencies.”
RBI had remained cautious of the “supposed risks” of these “unregulated private currencies” which according to several authorities that support the traditional fiat-currency system note as a direct threat to investors as well as the entire financial system.
However, the Supreme Court of India had since overturned RBI’s circular in its judgement on Internet and Mobile Association of India vs. RBI, citing that “in the absence of any legislative ban on the buying or selling of cryptocurrencies, the RBI cannot impose disproportionate restrictions on trading in these currencies.”
This was still not a definitive “stamp of approval” for cryptocurrencies to be allowed in the Indian financial infrastructure given the Supreme Court of India had simply stated that “there is no legal basis at the moment to impose heavy restrictions on cryptocurrencies.” This could very well may come to be an obsolete opinion should the Indian Parliament pass an act banning the use of cryptocurrencies.
Meanwhile, the Indian government’s reaction towards the emergence of cryptocurrency traders and transactions had been rather mixed. The country’s Finance Minister Nirmala Sitharaman, back in March 2021 had asserted that there will not be a total ban on the use of cryptocurrencies in the country.
However, the state is pushing for a fast track implementation of the Cryptocurrency and Regulation of Official Digital Currency Bill 2021, which is rumored to contain provisions that will completely ban the use of all cryptocurrencies in the Indian market.
How does the potentiality of cryptocurrency use look in Maldives?
It was noted by the island nation’s central bank, Maldives Monetary Authority (MMA) that several businesses operating in Maldives have had attempted to introduce cryptocurrency wallets into Maldives while many of the locals already owned crypto-assets such as Bitcoin or Ethereum.
Maldives Governor, Mr. Ahmed Naseer during his keynote speech at the “5th Maldives Islamic Banking and Finance Industry Conference” had pondered over the quick possibility of cryptocurrency mining operations in the Maldives as well.
“We need to balance technological progress with a sense of humanity, and moral values” the Governor said while speaking about the digital world and its recent innovations. The statement itself could be dissected into a possible “nay” in terms of the country moving towards a pro-cryptocurrency infrastructure given the fact the Governor himself had emphasized on the unregulated and ‘free’ nature of the digital financial alternatives.
Moreover, speaking about the risks of potential cryptocurrency establishments towards financial transactions, Governor Naseer said “cryptocurrency, like any other payment instrument poses, a variety of risks to the economy, and more importantly, to the financial sector of any country.”
This is strongly suggestive on the island nation’s paralleling stance with that of its close ally India.
Furthermore, the Maldivian Governor had also shared his concern over the misuse of cryptocurrency due to the financial alternative having anonymity, cross-border nature and easy accessibility by almost anyone.
In his conclusion, Governor Naseer had stressed on the importance of “allowing financial technologies” into Maldivian markets but also simultaneously implement “proper regulatory regimes” that will ensure such technological mechanisms are not abused for illegal means.
Based on his concluding statement, it might be a safe wager for anyone from the sidelines to make that Maldives may choose to move towards implementing blockchain technologies into its ever evolving financial infrastructure, should the country’s financial regulatory body find it worth the trouble.
Until then, the safest assumption would be to believe that cryptocurrency as a potential financial instrument in the Maldives, may not happen… until it is allowed to happen.