According to the founder of the India COVID-Crypto Relief, Sandeep Nailwal, the SHIB tokens donated by Vitalik Buterin turned out to be difficult to “cash out” and send to charity.
Recall that in May, the co-founder of Ethereum (ETH) sent a fantastic amount of 50 trillion Shiba Inu (SHIB) tokens to an Indian charity. Earlier, when India swept by a new deadly wave of COVID-19, he already donated 100 ETH and 100 Maker (MKR) worth about $ 650,000.
However, according to reports, since then, the fund, which received Buterin’s donations, spent only $ 20 million on the target funds. Another $ 20 million is at the stage of transfer. The founder of the fund, Indian entrepreneur Sandeep Nailwal, claims that he is cautious when distributing funds. In order to avoid problems with the authorities. Also, Nailwal wants to make sure that all the money goes to the Indian charities that need it the most. To ensure full transparency, the fund intends to hire a large audit firm.
Local regulations also took time. Under the law regulating foreign contributions, cryptocurrency donations must first be converted into dollars and then into Indian rupees. According to reports, the fund converted only 80% of all money to local fiat.
Despite all the delays, funds gradually distributed among food suppliers across the country. The money also went to an organization that is setting up small intensive care units in rural India.
SHIB rate crashed after donation
When it became known that Vitalik gave all his SHIBs, the token rate collapsed by 50%. According to statistics, on May 12, before Vitalik decided to part with his SHIBs, meme coin was worth $ 0.000028. After 24 hours, the price fell to $ 0.000021 and continued to decline. Since then, SHIB has not come close to the May heights. At the time of publication, one SHIB costs $ 0.000006.
Thus, at the time of the donation, the received SHIB tokens were worth more than $ 1 billion, but now the current SHIB reserves are estimated at $ 400 million.
The negative revaluation is associated, among other things, with a general decrease in the capitalization of the cryptocurrency market as a result of the collapse in May.
India’s shifting cryptocurrency sands
India is in no way able to determine its attitude towards the cryptoindustry. The position of the authorities and financial institutions has changed several times, including rumors of a possible complete ban on digital assets. The corresponding bill is currently under consideration.
Moreover, in May, the Reserve Bank of India (RBI) unofficially asked lenders to sever relations with cryptocurrency exchanges. In 2018, the regulator prohibited banks from dealing with cryptocurrency companies. However, two years later, the Supreme Court overturned this ban.
Meanwhile, RBI is not against digital currencies as such. Recent reports show that the Central Bank is exploring the possibility of phasing in the Central Bank’s digital currency (CBDC), the digital rupee. According to RBI Deputy Chairman T. Rabi Sankar, a pilot test of the CBDC may begin in the near future. While the Central Bank is discussing the details of the future digital rupee.