On Sep. 15, India revealed plans to bring in a law to ban trade in cryptocurrency for the third time this year. Officials have reportedly drafted a bill awaiting approval by the cabinet.
This development comes just a month after reports emerged of an impending crypto ban in August. At the time, financial regulators were actively finalizing an earlier bill to prohibit crypto trading in the country.
Entitled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019,” the bill was drafted about a year ago by an inter-ministerial committee (IMC).
Since then, regulators have engaged in extensive consultations on the draft’s final contents and seem ready to table the document in Parliament.
According to officials, the revised bill seeks to clearly define the crypto space’s illegality other than just prohibiting banks from dealing with digital assets.
To ensure that the law is more binding, officials have opted for a ban on everything related to crypto, including activities such as mining, promoting, or providing exchange services.
India’s On-again Off-again Crypto Ban Threats
India is currently moving out of step with other Asian nations that have chosen to regulate digital assets rather than ban them. This unwavering determination to abolish the asset class is seemingly fuelled by rising fraud perpetrated via crypto.
For example, hackers recently hacked India’s Prime Minister Narendra Modi Twitter account to promote a crypto scam. Wealthy Indian investors were also targeted last month in a fake crypto wallet con.
Crypto users in the country have endured a rough ride over the past few months, with rumors of new bans frequently swirling in the media.
In 2018, the Reserve Bank of India (RBI) moved to ban crypto, citing rising fraud cases in the sector. This ban was, however, overturned by the country’s Supreme Court in March 2020.
Since then, the RBI and other government agencies have made several attempts to compile a comprehensive crypto ban bill.
In Jul. 12, the Indian crypto community faced fears that a complete crypto ban was on the table after the finance minister allegedly moved a note to the cabinet—the note detailed plans to outlaw digital assets and overturn the Indian Supreme Court’s ruling.
Then, on Aug. 5, the Department of economic affairs teased a new ban after revealing that it set up a board to look into outlawing digital assets.
Despite the threats of an imminent ban, regulators have so far struggled to come up with a satisfactory bill. They often claim that their draft awaits approval from the government.
It now seems that officials have agreed on the bill’s final contents and are confident it will get cabinet approval this time around.
If adopted into law, the ban would affect approximately 1.7 million Indians who currently trade in digital assets.
Interests in Blockchain Tech
The latest threat of a complete ban on crypto comes as India’s government think tank, Niti Aayog, ramps up research into blockchain’s possible applications.
NITI Aayog has reportedly done extensive research on implementing the underlying tech for crypto in use cases such as pharmaceutical drug supply chains.