Indian government working on a law to ban cryptocurrency trading in the country

The government of India is planning to bring in a law that will potentially ban trading in cryptocurrency in India. This move, according to the experts, says that this can be a massive blow to the crypto industry that has witnessed a significant boost during the pandemic led lockdown.

The apex court in India, Supreme Court had set aside a circular from Reserve Bank of India. The circular was regarding the prohibition of cryptocurrencies related services by banks and financial institutions. Clarity on this probable decision from government or RBI has been awaited by Indian and international crypto majors for the digital tenders.

A government official said, “There was a view in the government that banning it through law would be more binding. It will clearly define the illegality of the trade. We have forwarded a note to related ministries for inter-ministerial discussions.”

The Indian government has been in consultations with the ministry of law, information, and technology ministry, as well as RBI, to formalize a legal framework to put a formal end to cryptocurrency trading in the country.

The official also said, “We are working on it. After inter-ministerial consultations, it would be presented to the cabinet for approval. Once Parliament resumes for the session, we are hoping to get it ratified.”  

Back in 2018, RBI had put a ban on various entities, thus prohibiting them from dealings in digital currencies like Bitcoin at an individual level or as a part of business dealing. The circular by RBI was junked by Supreme Court. The apex court had cited the fundamental right to trade as a reason and said that people must have the right to create a new cryptocurrency industry. In 2017, a panel was formed by the government, led by then finance secretary Subhash Garg. The aim of this panel was to study the market and ecosystem of cryptocurrency at the domestic and international levels. The panel’s report had recommended a ban on all private digital currencies.

Reports indicate that every week a business worth millions of dollars is being done in digital currencies, and the lockdown has only boosted the volume of this business. With traditional assets taking up beating as the economy is struggling, many investors have taken up the refuge in investing in cryptocurrencies.

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