It seems the government of India is planning to come up with a law towards banning cryptocurrency trading, according to the information passed to Moneycontrol.
According to the report, Indian officials are preparing to pass a law to ban cryptocurrency trading, citing an anonymous official who noted that consultations are ongoing between two ministries and the Reserve Bank of India (RBI) to come up with the framework for the said law.
The ministries involved are the Ministry of Electronics and Information Technology and Ministry of Law and Justice. According to the source, Parliament hopes to ratify the law after resuming the session. They are expected to resume session towards the end of August or early September.
The government is looking into a ban on cryptocurrency via legislative change instead of using other approaches like the RBI’s blanket ban on banks who deal with cryptocurrency companies, said the anonymous source.
The report further noted that the law would provide a clear definition regarding the illegality of trade. Many countries worldwide still have unclear cryptocurrency regulations, but authorities are putting in efforts towards enforcement.
In 2018, the RBI banned regulated entities from the provision of services to anyone or businesses dealing in cryptocurrencies such as Bitcoin. Later in 2018, India’s Supreme Court struck down RBI’s blanket ban on the basis that the citizens had the right to create a new industry of cryptocurrencies and exchanges together with the fundamental right to trade.
The decision led to the emergence of new exchanges across India, representing a remarkable boom. According to reports from cryptocurrency exchanges in the country, more people started using cryptocurrencies amid the pandemic.
Likewise, peer-to-peer Bitcoin trading in India has recorded a huge increase in 2020. A panel appointed by the government in 2017 proposed a ban on all forms of private virtual currencies, asking the RBI and the government to consider the development of an official virtual currency.