In a recent meeting of the Financial Stability and Development Council, a blanket ban on the use of private cryptocurrencies in India was discussed....
Cryptocurrencies are going through a tough time globally - but more so in India. The scenario in India may get from bad to worse, as the latest reports indicate that the country is mulling to impose a blanket ban on the use of cryptocurrencies. A release from the Press Information Bureau of India reveals that the Financial Stability and Development Council is working towards this plan.
The release reads:
"The council...deliberated on the issues and challenges of crypto assets/currency and was briefed about the deliberations in the high-level committee chaired by the secretary (economic affairs) to devise an appropriate legal framework to ban use of private cryptocurrencies in India."
The key words here are 'ban', 'use' and 'private'. A complete ban is being proposed on the use of private cryptocurrencies. The word 'use' here possibly means that it is trading and buying/selling which is being banned and not simply possessing cryptocurrencies. Another interesting word here is 'private' - which perhaps means that India might introduce a government or central-bank backed digital currency (CBDC) in the future. That, however, remains a speculation as of now.
Since April, the Indian cryptocurrency users are struggling to understand the government's intentions. The Reserve Bank of India had announced in April that no banking or payments institute in the country would engage with those people and businesses which are dealing in cryptocurrencies. A legal battle continues to be fought in the Supreme Court of India over the reversal of this order.
Among the members present for this meeting was Subhash Chandra Garg, secretary in the Department of Economic Affairs, who is the head of the panel looking into cryptocurrencies in India. This panel was established in 2017 and was working towards rules and regulations for a cryptocurrency framework in the country. However, it now appears that the country might just go ahead and ban cryptocurrency trade in the country instead of regulating it, as previously intended.[Recommended Reading: Reserve Bank of India vs Cryptocurrencies: The Complete Timeline]
The Indian cryptocurrency industry has suffered heavy losses. India's largest player in cryptocurrencies, Zebpay ended up shutting down its services in India and instead shifted base to Malta, expanding services to 20 European nations. Co-owner of Unocoin was arrested after India's first Bitcoin ATM was set up in a Bengaluru mall. The ATM was also seized by the police. (As of this article, the co-owner has been released).
Some even speculate that cryptocurrencies have been caught in a crossfire rising out of a tussle between the Government of India and the Reserve Bank, as has been reported across several newspaper reports in the country. The only thing, however, which is certain as of now is the fact that cryptocurrencies are going through a bad time in the country - and with this plan to ban cryptocurrencies altogether, the government might just be working towards hammering the final nail in the coffin of cryptocurrencies in the country.
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