India has announced that they might have to ban cryptocurrencies like Bitcoin and develop a national digital coin.
The government is planning to introduce a bill in the country’s lower house that would ban cryptocurrencies. The ban is to create a facilitative framework for creating the official digital currency to be issued by the Reserve Bank of India.
However, the proposed bill to ban cryptocurrencies allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
When India first tried to ban cryptocurrencies
Historically, it is not the first time Indian lawmakers are taking a strong position on cryptocurrencies. In 2018, an Indian government panel recommended banning all private cryptocurrencies and proposed up to 10 years of jail time for offenders.
Arun Jaitley, India’s finance minister that year, also said that the government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate these crypto-assets’ use in financing.
Fortunately, the bill was eventually dropped. However, the government still presents a harsh economic space for crypto in the country.
Could India ban cryptos? experts speak
With the bill to ban cryptocurrencies in India championed by Prime Minister Narendra Modi, whose party controls the two houses of Parliament, the legislation has a strong possibility of becoming a success.
However, crypto stakeholders in the country think otherwise.
In an article by Kumar Gaurav, the Founder and Chief Executive of Cashaa, he believes crypto can not be banned in India. Gaurav said in another interview that “there is no way any government” can ban crypto completely. Still, the government can make life difficult for cryptocurrency hodlers.
“They can certainly ban the legitimate use of crypto, which will only make it difficult for a common person who does not understand it to get involved in it,” said Gaurav. “However, what we understand is that the Indian government is trying to crack down on scams that are running in the name of Bitcoin.” In other words, the Indian government may not be opposed to the usage of cryptocurrencies, just the crimes associated with them.
Nischal Shetty, Chief Executive of cryptocurrency exchange, WazirX, India’s most trusted exchange, painted a few scenarios regarding the bill. He says it may not come up in this session of Parliament or come up but is referred to a standing committee. Lastly, he said it might come up and is passed in its current form.
Shetty described the first scenario as “the best-case scenario right now,” he also said that “we’ll need to push harder on educating our lawmakers about the pros of regulating crypto.
India cannot miss this technology & value creation that the crypto industry would provide, he said.
Similarly, Shetty described the second scenario as a “good cause” for crypto. However, the third scenario could “be a best or worst case depending on [the bill.”
“If the bill has a ban on crypto as a ‘payment’ but allows trading and holding of crypto, then [it will] Rocket,” he wrote. If the bill has [a] complete ban, then we will have to fight to get this reversed as an industry. The road to regulation is not easy!”
However, Shetty is confident that crypto will triumph in the end.