India is Likely to Ban Cryptocurrency according to Recent Policies
Compared to those countries who spare no efforts in making regulations for Cryptocurrency, India pushing its government in an opposite direction.
Early in 2019, Indian government has begun inter-ministerial consultations on drafting the bill on prohibiting Cryptocurrency and regulating official digital currency.
A year later, with the drafting of India’s ban on Cryptocurrency, Arun Jaitley, minister of finance, might honor its promise about the ban on bitcoin in India.
It is reported that, at present, the draft “Prohibition of Cryptocurrency and Regulation of Official Digital Currency 2019 ” has been distributed to relevant government departments. Last year, the Indian government set up a group, Subhash Chandra Garg, the finance minister, is responsible for drafting regulations on cryptocurrency and digital currency. Once the bill is endorsed, India may totally ban cryptocurrency.
According to an India official, several departments including DEA, CBDT, CBIC and IEPFA support the idea of a total ban on the sale and issuance of cryptocurrency.
Under pressure of regulation, India’s encryption market was resisted. According to the twitter of “Indian Crypto”, a supporter of India’s cryptocurrency, HDFC Bank has sent “threatening” e-mails to users who buy cryptocurrency. Users must “clarify” the intention of their transactions within 30 days, otherwise the bank will “freeze” the account. HDFC said that if users did not state the intention of the transaction with 30 days, they would “restrict the transaction”. Before this, HDFC has showed a sign of rejecting cryptocurrency when a new account was opened. But, the present action is more likely to be a thorough check in order to response for the regulation.
In fact, as early as the end of 2017, the Indian government and the Reserve Bank of India were worried about Bitcoin and other digital currencies, Indian Ministry of Finance treats Bitcoin as Ponzi scheme. In fact, India government was locked in the dilemma when facing the rapidly booming cryptocurrency and its risks.
In the early period of 2018, India announced that cryptocurrency is illegal, and India government will take measures to prevent it from illegal activities. With definite direction of risk prevention, India still allow the encryption industry, furthermore, encryption tax and regulation were put on agenda.
During this period, major Indian banks and credit card issuers did not prohibit users from buying digital currency, and related hedge funds in India were established one after another.
With the rapid development cryptocurrency in Indian, chaos such as tax evasion, drug trafficking, mining fraud, ICO and so on become the problem which the Indian authorities are worried about but can not effectively prevent.
In the end of 2018, it is reported that the Indian government has set up an “interdisciplinary committee” to investigate cryptocurrency, which disapproves of a total ban on cryptocurrency.A senior official attending the committee meeting said:
“We have held two meetings. It is generally believed that encrypted currency cannot be regarded as completely illegal. It needs to be legitimized through strong additional provisions. Negotiations are under way.”
But when the situation is gradually getting better, it was said that Indian regulatory sandbox does not contain cryptocurrency, and India, which was hesitated before, has completely abandoned the exploration of cryptocurrency regulation.
However, if we look at the history of Indian cryptocurrency, we can find that countless domestic encrypted asset violations often occurs, while regulatory level was difficult to improve.
For India, choosing to abandon cryptocurrency may be the best choice.