India intends to completely ban cryptocurrency, according to a senior government source.
In March, the Supreme Court of India cancelled an order from the Reserve Bank of India prohibiting financial institutions from servicing companies engaged in the cryptocurrency industry. Despite the legal thaw, the country’s Ministry of Finance issued a note for inter-ministerial consultations with a proposal to ban the circulation of digital assets in the country, FXStreet reported, citing a local media report.
After the internal deliberations, the proposal may be submitted to the parliament. Once approved, it may hit all industry players including investors, exchanges and companies dealing with digital assets.
A year ago, a government commission prepared a draft law banning cryptocurrency. It proposed imposing fines of up to $330,000 and prison sentences of up to 10 years for their use.
Some leading cryptocurrency experts in India expressed doubts that the new initiative would be just as prohibitive. Nishal Shetty, CEO of WazirX, one of the largest bitcoin exchanges in the country, urged investors to stay calm. He believes that Prime Minister Narendra Modi will not “slow down the development of the booming sector.” He also said there was a big gap between a note for inter-ministerial consultations and an actual law.
He tweeted, “Yet another FUD is here. Few things to note: 1. Its just a note 2. The committee will need to be formed 3. Draft needed 4. Industry consultations 5. Parliamentary approval I’m confident our PM will not stop a booming sector.”
The new proposal has again raised fears 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 the space, Cointelegraph reported.
Companies that have been expanding their foothold across India such as Binance and OKEx would have to pull back.
Speaking to reporters, an official of corporate advisory firm AKM Global said that if the law were to be passed as it was drafted last year, it “would completely decimate the crypto-industry in India.”
There’s much to be revealed regarding the proposed law, as no clarifications have so far been provided about what restrictions they might include.