Five months after courts lifted the blanket ban on crypto, the government is considering a new law banning cryptocurrency
According to a report from Indian news site Moneycontrol, the authorities in India are preparing to pass laws banning cryptocurrency transactions. Specifically, the Law and Justice Department and the Ministry of Electronics and Information Technology, in conjunction with the Reserve Bank of India (RBI), have begun to discuss topics related to the framework of this bill.
The Indian government is actively working towards a decision to ban cryptocurrency
At the meeting, officials said:
“Once Parliament resumes for the session, we are hoping to get the law ratified.”
At the moment, the government is considering a decision to ban cryptocurrencies through legislative changes, rather than methods such as the blanket ban from the RBI for banks dealing with crypto firms — because it would be more binding. “It will clearly define the illegality of the trade.
In March 2020, the Indian Supreme Court lifted the ban on banks dealing with cryptocurrency businesses. This has been a requirement imposed by RBI since July 2018. The abolition decision has led to a boom in new cryptocurrency exchanges nationwide.
However, government officials have floated the idea of enacting a new law that does not allow cryptocurrencies in India, replacing the RBI ban.
Ashish Singhal, founder, and CEO of Indian cryptocurrency exchange CoinSwitch said:
“The chances the government would impose a blanket ban on digital currencies had been more likely in 2019 than this year. He said there has been a change in the way crypto is perceived across India, hopefully for the better.”
Although many regions of India still face some of the restrictions caused by the pandemic since the country officially locked down in March, cryptocurrency exchanges in the country have continuously reported an increase. Strong growth when some investors leave traditional assets.
In May 2020, the India-based CoinDCX exchange had an average number of users ten times higher in the week after the RBI ban was lifted and grew 47% for the first quarter of 2020. The WazirX exchange also recorded monthly growth of more than 80% in both March and April. US-based cryptocurrency exchange Coinbase has entered the Indian market, specializing in providing cryptocurrency conversion and trading services since April 2020.
The Moneycontrol news site says:
“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.”
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