Can India Really Ban Cryptos Going by Recent Developments in Asia?
India’s Financial Stability and Development Council (FSDC) says they have recently discussed several issues including the ban of private cryptocurrencies in the country. The hint is contained in a public statement narrating the outcome of their 19th meeting held on Oct. 30 in which they reviewed the current global and domestic economic situation and financial sector performance. They also want to “keep a close watch on the developing situation and take all necessary measures.”
The release states that the Council “deliberated on the issues and challenges of Crypto Assets/Currency” where they were briefed about a High-level Committee’s discussion “to devise an appropriate legal framework to ban the use of private cryptocurrencies in India.” Nevertheless, they want to encourage the use of Distributed Ledger Technology, a form of blockchain, as planned out in the country’s 2018/19 budget. This push would be a complete deviation from a regional trend going by what’s been recorded in China, Japan and South Korea of late.
— Nischal (WazirX) ⚡️ (@NischalShetty) October 31, 2018
It is not clear how India would either separate DLT from crypto or place an outright ban on crypto use. It would also seem odd considering the various favorable developments linked to cryptocurrencies lately in the Asian region. From China to Japan, cryptocurrencies like Bitcoin recorded victories regarding their use in Asia’s top economies last week. This week, a South Korean court ruled in favor of a local crypto Exchange, Coinis, in a legal battle with one of the country’s largest commercial banks, Nonghyup. Also, Hong Kong’s financial body announced a regulatory framework for crypto-related platform operators.
These positive vibes should rub on India. The country also ought to realize that despite regulators’ ban on certain crypto-related activities in China last year, the demand for and use of cryptos among Chinese investors are still high.
There is a 2-week ultimatum handed down by India’s Supreme Court for the government to clarify the legality of cryptocurrencies and their use. The court’s request was made after nine local crypto exchanges challenged a Reserve Bank of India’s circular in April that disallowed banking entities from providing services to them. The misunderstanding dragged on for a while but was particularly revived after India’s first Bitcoin ATM was confiscated by police and the co-founder of Unocoin crypto Exchange, Harish BV, was arrested for allegedly acting illegally.