India is about to ban private crypto-money. A law will soon be introduced to this end. The country also plans to « provide a framework to facilitate the creation of an official digital currency ». According to an agenda published on the lower house’s website on 29 January, the issue will be discussed during the parliament’s budget session and the Reserve Bank of India (RBI), the country’s central bank, will be in charge of issuing the law.
As a reminder, the RBI has already argued in 2018 that Bitcoins, which exist only in digital form and carry no government stamps, cannot be considered as currency. It has therefore given financial institutions a period of three years to separate themselves from users of virtual currency.
This RBI ordinance has had a considerable impact on the activities of a large number of startups and local businesses. In fact, some companies have gone out of business as a result.
Litigation unresolved despite Supreme Court verdict
It is well known that India has never been a big fan of virtual currencies. In 2018, a panel of the Indian government already wanted to ban digital currency and impose heavy fines and prison sentences of up to 10 years for offenders.
Several stock exchanges and traders opposed this proposal. As a result, they have taken their rights to the Supreme Court. The court ruled in favour of the plaintiffs in a « historic » verdict handed down in March 2020. However, this did not prevent the panel from urging the government to launch an official digital currency.
Sumit Gupta, co-founder and managing director of CoinDCX, a cryptographic exchange bureau in India, still hopes to have the opportunity to advocate for the cause of crypto-currency users with the Indian government. « We are confident that the government will listen to all stakeholders before making a decision, » he said.
Gupta further indicated that the stock exchanges affected by the possible introduction of the bill are not standing idle in the face of the current situation. « We are talking with other stakeholders and we will certainly engage in a deeper dialogue with the government and show how we can truly create a healthy ecosystem in unison, » said a statement from the head of CoinDCX.