While the Indian government is inching closer to banning cryptocurrencies with a new law, crypto companies believe that “thoughtful regulation” is required rather than a ban.
The Indian government is inching closer to legalizing cryptocurrency after a circular injunction by the Supreme Court, issued by India’s Reserve Bank, was junk. Cryptocurrency firms, however, remain in a cryptopanic, saying India expected to join developing countries in embracing cryptography. A report by an inter-ministerial commission proposed a moratorium in 2019, recommending fines and sanctions on those involved in cryptocurrencies.
India planning to ban cryptocurrencies
While the Indian government is closer to prohibiting cryptocurrencies with a new act, cryptographic companies on appfutura claim that “thoughtful regulation” is appropriate rather than a prohibition.
Just over two months after the Supreme Court quashed a circular issued by the Reserve Bank of India banning cryptocurrency trading, a draft cabinet note was allegedly adopted by the Ministry of Finance. This notice seeks to create a legislative framework for the ban on cryptocurrencies in India.
The cabinet note was sent for consideration to other ministries, according to the paper. It was deemed ‘unconstitutional’ by The Supreme Court that quashed the RBI circular of 4 March.
Companies are cautiously optimistic.
While bitcoin news from the probable ban may discourage fans of the cryptocurrency, businesses remain cautiously optimistic.
“Fostering a fast-growing business is in India’s best interests. Banning is not an answer, and I don’t think that India is going to go for a sub-optimal solution here,”
said WazirX chief executive Nischal Shetty.
“India has been moving in the right direction as far as technology is concerned. I am optimistic that we will follow the footsteps of developed countries that have accepted crypto and introduced positive regulations,”
India is at the regulatory crossroads.
Navin Gupta, managing director at Ripple, South Asia & MENA, claims India is actually at a regulatory crossroads. India is currently at the legislative crossroads where one direction leads to disruptive innovation using digital asset-based blockchain innovations, and another is where players refuse to implement game-changing technology,
Stating that a ‘thought-out regulatory approach’ will help India, he said,
“We are confident that Indian policymakers will choose the former path after careful discussion and consultation with industry participants.”
Why do governments want to ban crypto?
Cryptocurrencies such as Bitcoin are outlawed or prohibited in a variety of countries around the world.
Although India’s stance has so far been vague, the RBI circular ban on cryptocurrency and this recent inter-ministerial report indicate the government is inclined to a prohibition.
A report from an inter-ministerial commission proposed legalizing cryptocurrencies in 2019. The study also recommended fines and penalties for those in the country carrying out crypto operations.
The rationale of the committee was that cryptocurrencies are unpredictable, and enabling them could lead to the growth of an alternative currency within the world.