- Cryptocurrency trading could be made illegal in India
- A financial news outlet cites an official as saying that parliament will ratify the ban once its resumes
- The ban would render the current legal dispute with the RBI irrelevant
The Indian government’s flip-flop attitude on cryptocurrency could be set to go nuclear if rumors on a cryptocurrency trading ban are to be believed. Financial news site MoneyControl cites a source inside the government as saying that a full on cryptocurrency trading ban in the country is in the works following years of consultation in the country and an existing between crypto exchanges dispute with the Reserve Bank of India (RBI).
India’s Checkered Crypto Past
India’s relationship with cryptocurrency has been complex to say the least, with inferred bans from the RBI followed by outright bans, appeals, reversals, and more. The Indian government issued its first warnings over Bitcoin in 2013, and the RBI has taken a cautious view of the cryptocurrency industry ever since.
2017 saw the first firm action on the nascent industry however when Bitcoin was officially not recognized as a legal currency, followed the year after by the RBI banning banks from dealing with crypto-handling entities. Earlier this year the Indian Supreme Court ruled that the RBI’s ban was illegal and overturned it, a measure that was quickly appealed by the RBI.
Cryptocurrency Trading Ban Could Be Imminent
It seems that since this ruling the RBI has gone straight to the top of the tree and began lobbying for a government-mandated ban on cryptocurrency trading which would largely kill any attempt by exchanges to overcome the RBI’s banking ban in court. MoneyControl cites their source, an official in the government, as saying that a trading ban is more than just a possibility:
There was a view in the government that banning it through a law would be more binding. It will clearly define the illegality of the trade. We have forwarded a note to related ministries for inter-ministerial discussions.
The source added that “once Parliament resumes for the session, we are hoping to get it (the ban) ratified”. The punishments to be levied for transgressors is not known at this stage, although a 2017 government panel on the subject recommended monetary fines and up to 10 years in prison for the worst offenders.
The news of a potential cryptocurrency trading ban will no doubt come as a huge blow to crypto exchanges operators who have been fighting the RBI and trying to keep their business afloat at the same time, resulting in many closing down.