Once again India is looking to introduce a law to ban cryptocurrencies, as the government sees a legal framework as being more effective than a circular from the Reserve Bank of India (RBI) in this regard. “A note has been moved (by the finance ministry) for inter-ministerial consultations,” a senior government official told ET.
Three months after the Supreme Court ruling to lift the banking ban, India’s Ministry of Finance has proposed to ban cryptocurrencies by law.
The spur for the draft cabinet note was the March 4 decision of the Supreme Court to quash the April 2018 circular from the RBI that prevented banks from providing services in support of cryptocurrencies, said the official cited above.
The note will be sent to the cabinet after consultations and, subsequently, to Parliament. If it is along similar lines as an earlier proposal, the law will deal a blow to investors, exchanges and other entities dealing in virtual currencies such as bitc ..
The new proposal has again inflicted fear in the Indian crypto community. While much enthusiasm was seen in the crypto space in the past three months as new startups sprouted to push crypto adoption across the nation, this proposal could be a hard blow to all businesses and individuals involved in this space.
Companies such as Binance and OKEx that have been expanding their foothold across India would have to pull back.
However, the going hasn’t been smooth, industry experts said. Several banks haven’t allowed payments for currency trades in India or overseas, in the absence of any specific communication from the RBI following the Supreme Court decision. Still, transactions have been taking place through other channels, the experts said.
Source : Economictimes