An Indian govt. official has claimed that two ministries along with the RBI [Reserve Bank Of India] are actively performing on a legal framework to ban cryptocurrencies on the subcontinent.
In line with a recent official news by the native reporting media, Moneycontrol, on 4th Aug, Indian authorities are making preparations to pass a law banning cryptocurrency trading. The website quoted an anonymous official stating that consultations between the Ministry of Electronics and IT, the Ministry of Law and Justice, along with the RBI had begun regarding the framework of such a law.
“Once Parliament resumes for the session, we hope to urge [the law] ratified,” the official said. Parliament is predicted to reconvene in late August or early September.
The official added that the govt was considering banning crypto assets via introducing a new legislative change — instead of methods like the blanket ban from the RBI for banks handling crypto firms — because it might be more binding. “It will clearly define the illegality of the trade,” the person said.
Cryptocurrencies & Indian Market
Earlier in March, the Supreme Court of India struck down a blanket ban on banks handling crypto businesses, which had been imposed by the RBI since July 2018. The repeal led to a boom in new exchanges across the country.
However, some govt officials have been floating the thought of enacting a new law not permitting cryptocurrencies in India in situ of the RBI ban.
Ashish Singhal, founder and CEO of Indian cryptocurrency exchange CoinSwitch, said that the chance of the govt would impose a blanket ban on digital currencies had been more likely in 2019 than this year. He said there has been a change within the way crypto is perceived across India, hopefully for the good.
Crypto Movement Due To COVID-19 Outbreak
Though several parts of India still face some restrictions on movement due to the COVID-19 outbreak since a lockdown was ordered earlier in the month of March, several cryptocurrency exchanges within the country reported strong growth as some investors moved faraway from traditional assets.
As reported earlier in May, India-based exchange CoinDCX had 10x times the typical number of users check in within the week after the RBI ban was lifted and 47% growth for Q1 2020. Trading platform WazirX also recorded a month-on-month growth of over 80% in both March and April. U.S.-based crypto exchange Coinbase entered the Indian market, offering crypto-to-crypto conversions and trading services from April.
Moneycontrol said that “millions of dollars worth of business in cryptocurrency is being proceeded every week, with the lockdown pushing up the volumes.”
“A growing number of investors have found refuge in digital currencies as traditional assets have taken a beating over worries about the health of the economy battered by the COVID-19 outbreak.”