India’s Plan to Ban Cryptocurrency

The Indian government is reportedly reviewing a plan that will see cryptocurrency banned in the country. Crypto is a popular payment method for activities such as poker betting and markets trading in India, and any change in Crypto regulations would have an effect on those markets. The move seems to have been driven by the supreme court quashing the banking prohibition that was imposed by the Reserve Bank of India (RBI), which is the country’s central bank.

Publication reveals India’s intent to ban cryptocurrencies 

The news came when the Economic Times (ET) published a report that stated the following last month:

“India is looking to introduce a law to ban cryptocurrencies, as the government sees a legal framework as being more effective than a circular from the Reserve Bank of India (RBI) in this regard.”

The publication revealed that the finance ministry had moved a note for inter-ministerial consultation. This is a knock-on effect of the supreme court in India quashing the RBI’s circular issued back in April of 2018, which banned financial institutions from providing services to crypto companies, including exchanges. 

Is the ban likely? Or are we jumping the gun?

Since the news came out, many experts have been sharing their thoughts on the likelihood of cryptocurrency being banned in India. The CEO of Unocoin, Sathvik Vishwanath, believes that a blanket ban is unlikely. Despite being at the head of a cryptoasset trading business, Sathvik welcomes this as a step that is necessary toward regulating crypto in India. 

Sathvik is not the only one who does not believe the ban will come into force. The CEO of WazirX, which is a bitcoin exchange, Nischal Shetty, shares the same view. He has stated that he is positive there will not be a regressive stance by putting a blanket ban on cryptocurrencies in India. Instead, he sees India following the footsteps of countries like Australia, the UK, US, and Japan, which have embraced crypto and put effective regulations in place. 

Not only does Arjun Vihay, the co-founder of Giottus, see a ban as unlikely, but he has stated that it would be incredibly difficult for the government to do, as none of the other developed economies have banned cryptocurrencies. 

The substance of the report has been questioned 

It seems that the general feeling regarding the news is that it is a bit premature and overblown. A lot of industry insiders have questioned the substance of the report. Shetty said the following to CoinDesk:

“This is all leaked information. There is movement for sure, but no one has been able to get clarity on whether it specifically talks about a ban, or whether it talks about just moving forward with regulation. There are a lot of assumptions.”

Shetty believes this is all about taking the next steps in terms of regulation, rather than any bans enforced. Having spoken to ministers in Parliament, he has noticed that they are very positive about moving forward with regulation and that numerous have been vocal about a ban not being the solution. 

All in all, it seems that there are definitely some changes ahead in the cryptocurrency sector in India, but it may not be as drastic as was first feared.

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