Digital Assets: Indian Government Mulling New Lockdown on Cryptocurrencies

August 5, 2020 | Digital Assets, News
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Though the Supreme Court vacated the Reserve Bank of India’s ban on dealing with crypto businesses, the government will have the last word.

Crypto aficionados in India were delighted with the Supreme Court of India’s March decision to overturn the Reserve Bank of India’s 2018 ban on providing services to any individual or business dealing in digital currencies. But their jubilation may be short-lived. According to Moneycontrol, the India government is seriously considering a law to outright ban trading in cryptocurrencies.

Indian government may clear the air once and for all

“There was a view in the government that banning it through law would be more binding,” an unnamed government official told Moneycontrol. “It will clearly define the illegality of the trade.”

“We have forwarded a note to related ministries for inter-ministerial discussions,” the person added.

Trading in cryptocurrencies has boomed after the Supreme Court judgment and during the enforced COVID-19 lockdowns. However, industry players have been waiting for the government’s response and action, if any.

It seems that the government has made up its mind. The official told Moneycontrol that the government was thrashing out the structure of a law to ban cryptocurrencies in India and that it was in discussions with the ministries of law and IT, as well as the RBI.

“We are working on it. After inter-ministerial consultations, it (the note) would be presented to the cabinet for approval. Once Parliament resumes for the session, we are hoping to get it ratified,” the official said.

India’s government drafted a ban on cryptocurrencies

Previously, the government moved on the matter in 2019, when its finance ministry tabled a draft bill to bank cryptocurrencies. It was titled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019.”

Mining, holding, selling, issuing, transferring, or use of cryptocurrency was punishable with a fine or imprisonment of up to 10 years, or both, it said.

Related Story:  India May Jail People who Mine, Hold or Transact Cryptocurrencies

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