An Indian government official claimed that two ministries and the Reserve Bank of India are actively working on a legal framework for banning cryptocurrencies in the Indian subcontinent.
According to a report by Indian news site Moneycontrol on August 4, the Indian authorities are preparing to pass a law banning cryptocurrency trading. An anonymous official was quoted on the website as saying that consultations between the Ministry of Electronics and Information Technology, the Ministry of Law and Justice and the Reserve Bank of India had started under such a law.
“As soon as Parliament resumes sitting, we hope to ratify [the law],” the official said. Parliament is expected to meet in late August or early September.
The official said the government was considering banning cryptography through legislative changes – rather than methods like the Reserve Bank of India’s blanket ban on banks from doing business with crypto firms – because it would be more binding. “It will clearly identify the illegality of the trade,” the person said.
In March, India’s Supreme Court lifted a blanket ban on banks engaging in crypto businesses that the Reserve Bank of India had imposed since July 2018. The repeal sparked a boom in new exchanges across the country.
However, government officials have taken up the idea of passing a new law banning cryptocurrencies in India instead of banning the RBI.
Ashish Singhal, founder and CEO of Indian cryptocurrency exchange CoinSwitch, said the likelihood that the government would impose an outright ban on digital currencies is more likely in 2019 than this year. He said there is a change in the way cryptocurrencies are perceived across India, and hopefully for the better.
The encryption protection at shutdown
Although many parts of India have still faced movement restrictions due to the pandemic since the lockdown order in March, the country’s cryptocurrency exchanges have seen strong growth as some investors steered clear of traditional assets.
Cointelegraph reported in May that the India-based CoinDCX exchange saw ten times the average number of users who signed up in the week after the RBI ban was lifted, on top of a 47% growth for the first quarter of 2020. The WazirX trading platform also recorded monthly. . Growth of more than 80% in March and April. In addition, the US-based cryptocurrency trading platform has entered the Indian market and is offering a cryptocurrency exchange for cryptocurrency and trading services from April.
Moneycontrol said, “Millions of dollars in cryptocurrencies are happening every week, with closings adding to volume.”
“More and more investors have taken refuge in virtual currencies as traditional assets have been hit by concerns about the health of the economy hit by the coronavirus outbreak.”