Editor's Note: This article comes fromChain reference (ID: lianneican), Author: Internal Reference Jun, reprinted by Odaily with authorization.

Editor's Note: This article comes from

Chain reference (ID: lianneican)

Chain reference (ID: lianneican)

, Author: Internal Reference Jun, reprinted by Odaily with authorization.

The legal status of encryption technology in India has been unclear. In March, India's Supreme Court struck down a 2018 circular by the Reserve Bank of India. The notice prohibits all regulated national banks from providing services to the exchange. It was hailed by enthusiasts as a liberating move that allowed the industry to flourish.

This has been interpreted as the government’s way of introducing a law that would effectively impose a blanket ban, punishing anyone involved in trading, mining, holding and exchanging crypto with hefty fines or massive jail sentences running into millions of dollars.

If all this is true, it will have a big impact on the encryption market.

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Views of all parties

Since then, several interviews and articles with senior figures from major Indian exchanges have appeared online, with their respective interpretations.

Wazirx CEO Nischal Shetty firmly believes that the Indian government will not ban cryptocurrencies. He stated on Tuesday that “I am pretty sure that India will not take a back-and-forth stance on cryptocurrencies with a blanket ban. In terms of regulation, I am sure that India will follow in the footsteps of developed countries like Japan, US, UK, Australia etc. which have embraced crypto. "

Shivam Thakral of Buyucoin, CEO of another cryptocurrency exchange in India, also believes that the Indian government will not take the approach of banning cryptocurrencies. “I personally think that the Indian government will soon introduce some professional regulations on cryptocurrencies, because India is part of the G20 and will not easily allow India to ban cryptocurrencies. As a member of the G20, it is recommended that its member countries adopt It is better to use FATF rules to regulate cryptocurrencies.

At present, the government is facing two major problems. First, the government must have the conditions and execution capacity to implement the ban. Second, a regulation would grant them access to data so that cryptocurrency usage can be effectively managed/tracked/taxed. If India bans cryptocurrencies, but cryptocurrencies go mainstream, [India will] lose millions of dollars in revenue and job creation.

Sharan Nair, chief commercial officer at Coinswitch, reiterated that "the news of a possible crypto ban in India is not new. The bill was introduced a year and a half ago." Many positive developments i.e. Supreme Court lifting banking ban on cryptocurrencies, multiple Indian crypto companies raising funds and growing customer enthusiasm. We hope that the authorized body will consult all stakeholders before making a decision Opinion."

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Will it really happen?

The Indian government has started inter-ministerial consultations on drafting the "Banning of Cryptocurrencies, Regulation of Official Digital Currencies Act 2019," a government official revealed. A committee comprising various government ministries including the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the Indian Investor Education Protection Fund Management Association (IEPFA) has agreed that the sale should be banned entirely. , purchase or issue various cryptocurrencies. It is reported that Subhash Chandra Garg, Secretary of Economic Affairs of India, is the head of the financial group responsible for drafting the cryptocurrency policy.

Considering that digital currencies may be used for money laundering, the committee believes that digital currencies can be banned under the Prevention of Money Laundering Act. It is reported that the Ministry of Corporate Affairs pointed out in the feedback submitted to the Ministry of Economic Affairs that companies or individuals are illegally earning huge profits through the sale, purchase and issuance of cryptocurrencies such as Bitcoin and Ethereum. These crypto-related activities are neither transparent nor regulated by any law, and many of them are Ponzi schemes to "defraud gullible investors."

Obviously, the actions of the Indian government this time are contrary to what was reported by the media at the end of last year.

In December, the media reported that another government committee recommended legalizing cryptocurrencies, emphasizing that there is a general consensus that the legality of cryptocurrencies cannot be completely rejected.

The debate over the legality of cryptocurrencies in India began in April 2018, when the RBI said it would no longer provide services to individuals or entities involved in cryptocurrencies. To oppose this ban, many crypto companies have filed suits in the Supreme Court against the central bank ban.

In February, the Supreme Court of India decided to give the Indian government the last four weeks to formulate cryptocurrency regulatory policy, after which the court will stop hearing cryptocurrency-related cases, including petitions against the RBI’s cryptocurrency ban. However, the Supreme Court of India has once again postponed the hearing on cryptocurrencies at the request of government lawyers. According to Crypto Kanoon, the next hearing may be held in the second week of July.

A government panel led by India's economic affairs minister previously expressed concern over the impact of cryptocurrencies on the stability of the rupee. Such concerns were no doubt heightened by a March report from the Bank for International Settlements (BIS), which recommended that central banks “continue to regulate digital currencies outside central bank control.” Additionally, the BIS warned that even a central bank digital currency (CBDC) could pose a threat to financial stability.