After a change of direction in March, India has now U-turned its position on crypto, with senior politicians now proposing a ban
The crypto industry has been struggling to get off the ground in India. Previously cryptocurrencies were banned in India following a ruling from the Reserve Bank of India. However, in March things seemed to change for the better when the Supreme Court intervened to repeal the Reserve Bank’s ruling.
This made it legal for banks to provide services to crypto companies. Since March, the sector has seen marked growth and interest with a number of new exchanges being created, and receiving foreign investment.
Tensions with the Reserve have naturally remained a problem. Allegedly some banks have refused to cooperate with these new exchanges. As well as this, the Reserve has been unwilling to answer questions asked by exchanges for which taxes they are liable for. This is a serious business consideration for any company, so exchanges have faced large strategic problems for business planning.
According to The Economic Times, India’s own government is now about to turn on the sector. In an attempt to foil the repeal of the Supreme Court, politicians are now rallying together to ban cryptocurrencies once again.
It was said that ‘a note has been moved (by the finance ministry) for inter-ministerial consultations’, after being approved by the cabinet, it will need to be agreed upon by parliament. The note intends to impose a clear legal framework, as opposed to the legal no-man’s-land the Reserve’s ruling left had left banks in.
Should this law be passed it will be a huge blow to crypto enthusiasts in India and will place a question mark over the future of the sector in India.
These developments are indicative of widespread fear and suspicion towards crypto from some nations. One could argue that the idea of decentralising monetary control is a threatening notion to those who are in the centre.
As such, it is important to remember that the battle for cryptocurrency adoption is far from over. The proposed punishments for breaking the law on the banning of cryptocurrencies will land people anywhere between one to ten years in prison. This is an extremely lengthy sentence considering that the act of holding cryptocurrencies is not impacting on anybody else’s civic rights.
Just when crypto enthusiasts in India seemed to catch a break, these past three months might all have been for nothing. Only time will tell whether the reports about the government’s intentions have substance.