Indian Government Actively Working Towards New Crypto Ban

Wednesday 05 August 2020, 3:28 PM AEST - 1 month ago

An Indian government official has claimed that two ministries and the Reserve Bank of India are actively working on a legal framework to ban cryptocurrencies on the subcontinent.

According to a Aug. 4 report from Indian news website Moneycontrol, authorities in India are making preparations to pass a law banning cryptocurrency trading. The site quoted an anonymous official as saying that consultations between the Ministry of Electronics and Information Technology, the Ministry of Law and Justice, and the Reserve Bank of India (RBI) had begun regarding the framework of such a law.

Once Parliament resumes for the session, we are hoping to get [the law] ratified," the official said. Parliament is expected to reconvene in late August or early September.

The official stated that the government was considering banning crypto through legislative change — rather than methods such as the blanket ban from the RBI for banks dealing with crypto firms — because it would be more binding. It will clearly define the illegality of the trade, the person said.

Laws on cryptocurrencies

In March, the Supreme Court of India struck down a blanket ban on banks dealing with crypto businesses, which had been imposed by the RBI since July 2018. The repeal led to a boom in new exchanges across the country.

However, government officials have been floating the idea of enacting a new law not allowing cryptocurrencies in India in place of the RBI ban.

Ashish Singhal, founder and CEO of Indian cryptocurrency exchange CoinSwitch, said that the chance the government would impose a blanket ban on digital currencies had been more likely in 2019 than this year. He said there has been a change in the way crypto is perceived across India, hopefully for the better.

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