Authorities in India might have the wrong perception about cryptocurrencies as new rumors have surfaced, suggesting that the nation is yet again looking to place a complete ban on cryptocurrencies.
After struggling for more than 2 years, the Indian Supreme court lifted the blanket ban placed by the Reserve Bank of India (RBI), enabling Indian crypto exchanges to provide bank withdrawals and deposits to traders.
Just months later, an official of the Indian government has now revealed that the authorities in the nation are actively working on new regulations to completely ban cryptocurrencies.
Reported by Indian media outlet Money Control, the law would be looking to ban cryptocurrency trading.
The report quoted an anonymous official who informed that consultations among the Ministry of Electronics and Information Technology, the Ministry of Law and Justice, and the Reserve Bank of India, had already begun regarding the framework of such a law.
“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.
Parliament is set to reassemble in late August or early September.
The official said that this time the government wants to ban cryptocurrencies via changes in the legislation that would “clearly define the illegality of the [crypto] trade” rather than placing blanket bans on banks, adding that this would be more binding.
Crypto advocates remain optimistic about India
Nischal Shetty, CEO of Binance owned Indian crypto exchange WazirX, told The Daily Chain:
“In the past few years, there have been many rumors about crypto getting banned in India. However, crypto has only emerged stronger. 2020 has only made the need for crypto adoption stronger.
Today, the majority of once-thriving industries are in shambles. Crypto, on the other hand, has been generating jobs across a variety of functions — legal, compliance, tech, marketing, business development, finance, etc. — in India and abroad.”
He further added the COVID-19 crisis has boosted crypto adoption in India and expressed his optimism about the Indian crypto industry. He said:
“Moreover, with the pandemic induced economic troubles becoming more apparent, alternative assets like Bitcoin and other crypto are gaining popularity among investors. Imagine what we can achieve with positive regulation! I’ve also said it before, that when it comes to regulating crypto, I’m positive that India will follow the footsteps of developed countries like Japan, USA, UK, Australia, and more.”
Similar reports of a ban surfaced back in June when an Economic times report noted that the government sees a legal framework as being more effective at barring crypto than a circular from the RBI.
Despite the rumors, the Indian crypto industry has been booming ever since the RBI ban was lifted back in March, with local exchanges seeing an inflow of new users.
WazirX registered rising volumes of up to 270% in March and April, along with a surge in new sign-ups and active users.
Another India-based exchange CoinDCX had ten times the average number of users sign up in the week after the RBI ban was lifted and 47% growth for Q1 2020.
Moneycontrol reported earlier that “millions of dollars’ worth of business in cryptocurrency is being done every week, with the lockdown pushing up the volumes.”
“A growing number of investors have found refuge in virtual currencies as traditional assets have taken a beating over worries about the health of the economy battered by the coronavirus outbreak.”