Indian Government Recommends Ban on all Cryptocurrencies

Indian finance minister Nirmala Sitharaman recently revealed that a high-level committee suggested that all non-state issued cryptocurrencies will be banned in the country.

Sitharaman, in response to a question in Rajya Sabha whether the central government is planning to issue strict guidelines on cryptocurrency trading. Said: “A high-level Inter-Ministerial Committee (IMC) constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies. To propose specific actions to be taken in the matter recommended in its report. That all private cryptocurrencies, except any virtual currencies issued by the state, will be prohibited in India.”

Former Coinbase CTO Balaji Srinivasan doesn’t agree with the potential ban. Tweeting that, “India should support crypto as a pillar of its foreign & domestic policy. It defends national security by preventing deplatforming. Deters fraud via on-chain accounting, and offers a decentralized alternative to a new Cold War.”

In 2018, the Reserve Bank of India banned all banks in the country from processing transactions related to cryptocurrency. The Supreme Court overturned that decision in March of 2020.

There is also a belief that existing laws in the country are inadequate to handle the issues concerning them. But the minister of state for finance Anurag Singh Thakur says a crypto bill is being finalized and will soon be sent to the cabinet.

RBI Doesn’t Have Legal Framework To Regulate Cryptocurrencies

“Regulatory bodies like RBI and Sebi etc also don’t have a legal framework to directly regulate cryptocurrencies. As they are neither currencies nor assets or securities or commodities issued by an identifiable user,” Thakur said. “The existing laws are inadequate to deal with the subject. The government had formed an inter ministerial committee and the committee has given a report. Post that there was a meeting of the empowered technology group which happened earlier.”

“The committee of secretaries which was chaired by the cabinet secretary has also its given their report. The bill is being finalised and will be sent to the cabinet soon. So we will be bringing the bill soon.”

This was excellent news to hear as far as Nischal Shetty, founder and CEO of Indian crypto exchange WazirX is concerned. “’Bill to Regulate Crypto’ Love to hear that. The government of India might finally be on the path to positive crypto regulations. Besides that, a Cabinet nod yet to be given for the bill. So it’s early stages right now. Such a great start to the week!”

Earlier this month, the RBI said there are plans to bring a digital version of the Indian Rupee.