CryptoTrends reached out to blockchain enthusiasts and lawyers within the high-tech domain to seek fresh details about the state of cryptocurrencies like Bitcoin in India. Crypto investors have been wary of investing in India due to regulatory uncertainties and no clear stance boosting their confidence. The latest development points out how the government is working on a draft law to ban cryptocurrency trading. The blockchain payments industry has been benefited due to COVID-19 and we witnessed increasing investment from retail investors within this space.
Previously, the Reserve Bank of India had prohibited financial institutions and banks from conducting business with cryptocurrency exchanges and related businesses in a bid to virtually restrict trading. The Supreme Court, apex court within India, in March 2020 overturned this ruling and the industry saw a ray of hope to the eventual legalisation of cryptocurrencies in India.
“Sources close to the government have shared that the law ministry, in consultation with ministry of IT and RBI, is working on a draft law to prohibit cryptocurrency trading. This legislation will be binding pan-India.” a legal counsel at a major Indian cryptocurrency exchange shared with CryptoTrends choosing to remain anonymous.
The law is likely to be set for review when parliament reopens post-COVID-19. With the central government in the majority within the parliament, it is most likely to be ratified without much opposition. This legislation will supersede the Supreme Court’s judgement as it was a ruling that merely declared a previous RBI circular void and null.
This is a not a fresh development as the government had previously instituted a special task force headed by Subhash Garg, the then secretary of Finance, to understand the state of cryptocurrencies within India. The 2017 report submitted by the task force proposed a blanket ban on private digital currencies and recommended the government to launch its own cryptocurrency. Moreover, it also suggested a hefty INR 25 crore fine along-with 10-years imprisonment for people dealing in crypto. Thankfully, the recommendations weren’t implemented.
