Five months ago, the Indian crypto industry was filled with hope and excitement as the Supreme Court lifted a ban on cryptocurrencies. Nevertheless, the excitement and hope were once again overshadowed by uncertainty, after an anonymous government official allegedly reported that the government is drafting a new law to ban digital currencies.
According to the alleged government official, two ministries and the Reserve Bank of India ( RBI) are proactively structuring the legal framework to outlaw cryptocurrencies for good in India. A report by the Indian news outlet, Moneycontrol, on August 4, claimed some Indian authorities want to ban cryptocurrency trading in the country. The report suggests that the Ministry of Electronics and Information Technology, the Ministry of Law and Justice, and the Reserve Bank of India (RBI) are deliberating on the structure of the law to ban digital assets.
New crypto ban scare in India
The news outlet quotes the anonymous official, saying, “Once Parliament resumes for the session, we are hoping to get [the law] ratified.” Indian lawmakers are expected to assemble again in late August or at the beginning of September. As per the official, the government wants to outlaw cryptocurrencies through a statutory structure, as opposed to other means such as RBI’s blanket ban. He adds, “It will clearly define the illegality of the trade.”Back in 2018, the Reserve Bank of India prohibited banks from offering their services to businesses involved with cryptocurrencies. However, the crypto ban was lifted by the Supreme Court back in March. Notably, the recent revocation of the blanket ban led to the rise of many new cryptocurrency exchange platforms in the subcontinent. Indian authorities are now threatening to introduce a law banning cryptocurrencies rather than RBI’s crypto ban.
Crypto is vital to Indians during coronavirus pandemic
Cryptocurrency exchanges across India have reported substantial growth in the last few months, as investors shift away from traditional assets. Notably, many parts of India are under strict movement restrictions since the government imposed a lock-down in March.
Indian-based crypto exchange platform, WazirX, saw a massive 80 percent growth in both March and April. Furthermore, CoinDCX, which is also based in India, saw ten times more new registrations the week after the crypto ban was lifted, than the average registrations before the repeal.