The Indian crypto community had been struggling for 2 years ever since the Reserve Bank of India, the nation’s central bank, placed a ban on the sale or purchase of cryptocurrency for entities regulated entities back in 2018 by terming cryptocurrency as non-sovereign.
A year later, the Indian cryptocurrency watch panel proposed fines and jail time for cryptocurrency use with up to ten years in prison for general crypto use in the country. The news sent down shockwaves through the community and caused a lot of damage to the underlying crypto economy.
However, the nation finally breathed a sigh of relief when the Indian Supreme Court “struck down” RBI’s ban on crypto trading in India earlier in March 2020. In no time the crypto industry was booming with crypto-based business popping up, along with a spree of foreign investments from the likes of Binance and Kraken.
But a recent article from local media outlet The Economic Time published last Friday suggested that the lawmakers in India were planning on placing another ban on the crypto industry, just four months after it was un-banned. As usual, the news shook the crypto community that was already recovering from the previous ban.
Another Crypto ban?
Titled “With a law, India plans lasting ban on crypto,” the report was based on comments from an unnamed “senior government official” who told The Economic Times that “A note [presumably on crypto] has been moved (by the finance ministry) for inter-ministerial consultations.”
Without any clarity on the matter or what the said note was about, the report added that it was spurred by the Supreme Court’s decision to unban crypto. Furthermore, the article continues to claim that the new ban could be based on the 2019 draft bill that proposed a ban and jail time.
Noting that most crypto-assets don’t have any intrinsic value and supporting the RBI ban, the draft bill concluded: “the Committee has recommended a law banning the cryptocurrencies in India and criminalizing carrying on of any activities connected with cryptocurrencies in India.”
Indian Crypto entrepreneurs speak up
On this matter, Nischal Shetty, CEO of popular Indian exchange WazirX, told crypto news platform Coindesk that “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 added.
According to his own government sources, Shetty said he believes that the Finance Ministry is consulting other departments to figure out the next regulatory step for crypto in India.
“Someone from the Finance Ministry has proposed that they should consider looking into cryptocurrencies and figuring out what to do, either to ban it, or to regulate it,” Shetty added, as the Supreme Court’s decision has made this a priority for officials.
“[The government] wants to see progress and regulations,” he added.
Sumit Gupta, CEO of CoinDCX, one of the country’s largest exchanges, said the “reconsidering past bills is likely part of the process of forming clearer regulations around the use of cryptocurrencies within India.”
Gupta talked about the rapid progress that India is seeing after the lifting of the RBI ban, stating that it had led to record trading volumes and user adoption, calling recent growth in the sector “unprecedented.”
“Given the previous open-mindedness of government officials and regulators in the Supreme Court case, where they were willing to engage with cryptocurrency sector leaders in dialogue about the future of the industry – we are confident that a similarly communicative approach will be taken in making this decision,” he added.
A Spokesperson from the Bangalore-based exchange CoinSwitch highlighted that “the report has no mention of the particular government body responsible for such actions or contains quotes from reliable sources. As such there is a lack of clarity and until further details reveal we would carefully monitor the situation.”
As of now, it looks like the recent news has mostly been speculative. However, crypto enthusiasts in the nation continue to panic, with mixed emotions in the community. It is yet to be seen whether the regulators release an official statement on this matter.