Special Committee Calls For Complete Crypto Ban In India As Supreme Court Continues To Delay Crypto Hearing
The tussle between the Indian crypto community and the government is still ongoing as the government aims to completely ban cryptocurrencies from the country. The government also seeks to establish its own cryptocurrency.
The Current Battle Around Cryptocurrencies
In the going battle between cryptocurrency users and regulatory authorities in India, a committee comprised of legislators and bankers has proposed that the government enforces a complete ban of cryptocurrency in the country. The committee came up with a draft bill titled “Banning of Cryptocurrency and Regulation of Official Digital Currency Act, 2019 which criminalizes all crypto-related activity in India. Engaging in crypto-related activity would attract a prison sentence of up to 10 years or a fine of three times the amount gained through the use of digital assets.
The committee has also suggested that the government establishes its own virtual currency. The digital currency would supposedly be called the E-Rupee and it would become the sole legal digital currency in India.
The bill has been in the works for close to two years now and it was finally published on the 22nd of July on the finance ministry’s website. The proposed bill adds to the pressure on the crypto community which came from the Reserve Bank of India’s (RBI) directive which was issued last year.
Through a circular, the RBI banned all regulated financial institutions from engaging in business with crypto-related businesses. Accounts belonging to crypto exchanges were closed down and a number of crypto businesses have shut down since the directive. Crypto exchanges have also had to shut down due to a hostile business environment.
After the RBI banned financial institutions from providing services to crypto businesses, some stakeholders in the crypto industry filed writ petitions in a bid to challenge the ban. The issue was due to be heard by the Indian Supreme Court in September last year but the hearing keeps being delayed. The matter was due on the 23rd of July but it has been delayed further to the 2nd of August.
Cryptocurrencies Have Not Yet Been Banned
There are misinformed opinions that Indian has already banned cryptocurrencies which is not the case. Currently, Indian crypto holders are trying to figure out what to do with the digital assets in their possession just in case the bill is voted into law. However, it is highly unlikely that the bill will be passed anytime soon.
Speaking on the current legality of cryptocurrency, Shri Anurag Singh Thakur, Minister of State in the Ministry of Finance said that the government has not banned digital assets in the country. He went on to say that there are currently no separate laws which deal with crypto-related matters. As a result, all concerned authorities such as the RBI, Enforcement Directorate and Income Tax authorities can only act within the framework of the existing laws.
The Bottom Line
The Indian crypto industry has been put in a tight position by a directive issued by the RBI and the proposed bill that has been created by a special committee. Although these regulatory bodies are calling for a complete ban of cryptocurrency, crypto trading has not yet been declared illegal. A number of crypto businesses and exchanges have had to shut shop due to a hostile business environment and this has affected the crypto industry in the country. It is yet to be seen whether or not the Indian government will follow through and ban cryptocurrency completely.