Proposal in a nascent stage and eventually may take a very different shape, says Finance Ministry official
Barely three months after India’s Supreme Court overturned the Reserve Bank’s ban on cryptocurrency payments, the country’s central government has reportedly drafted a proposal to bring in a law to ban digital coins once and for all. While legal experts believe any such ban on virtual currencies would not sustain in a court of law, industry leaders say the move could be a fatal blow to the virtual dreams in the country.
Quoting an unnamed government official, an Indian media report said that a note on the proposed move to ban cryptocurrencies in the country was recently moved by the Finance Ministry for inter-ministerial consultations, following which “it will be forwarded to the Parliament for final review”. The bill may be proposing 10 years in jail or up to USD 3.3 million fine for using cryptocurrency, according to the report.
“But even if they formulate a law to ban cryptocurrencies in India, its legality would not sustain in a court of law. The top court had in March invalidated the central bank’s ban on cryptocurrency payments. So, any such ban again can be challenged in Supreme Court,” Delhi-based intellectual property rights lawyer Deep Mukherjee told The Indian Sun.
Crypto industry leaders have also come down heavily on the Indian government for eyeing crypto trade suspiciously, with some taking to social media platforms to condemn any such move at a time when the virtual currency space has been witnessing sprouting of new startups, particularly post-Supreme Court’s overturning of RBI ban.
“Dear Indian government, this tweet may help you—blockchain is not equal to bitcoin and Bitcoin is not equal to terror funds. Even credit cards are used on darkweb, are we proposing to ban fiat money too?” tweeted Rahul Kumar, the CEO of EGW Capital, a crypto bank.
“China is moving at lambo speed in case of blockchain bitcoin and crypto. China is pumping millions in cryptomining and digitalyuan. It’s sad to see we are finding it tough here in India to explain blockchain advantages. Time to wakeupindia,” he wrote.
In a statement, India’s Bitcoin exchange WazirX founder Nischal Shetty also said that a blanket ban on cryptocurrency would not be an ideal move at a time “when the Internet and Mobile Association of India is working on a code of conduct for cryptocurrency companies in the country”.
“With over 5 Million young crypto enthusiasts, India is poised to gain a big share of the USD 250 plus Billion crypto market. If the government is concerned about cryptos being used for criminal activities, a blanket ban is the wrong way to go about it.
“In fact, exchanges can help the law enforcement agencies as well as educate masses. Over the past few years, we have worked with domestic and international agencies to investigate frauds where cryptos were involved. Countries such as the US, the UK, Japan, Indonesia, Malaysia, EU region, are tackling crypto in a similar way so that they foster innovation and fight crime at the same time,” he said.
Shetty also tried to allay the fears of stakeholders. “All in all, I think there’s nothing to worry about the note as of now. I look forward to helping our government formulate the right crypto regulations, given my on-ground experience working for the crypto ecosystem in India,” he said.
When contacted, a Finance Ministry official confirmed the development but said that “it’s in a nascent stage and eventually may take a very different shape”.
“In the Reserve Bank case, crypto stakeholders had cited the absence of a formal law banning the trade of virtual currencies in the country. Moreover, the Supreme Court had only overturned the central bank’s ban but did not rule on the legality of cryptocurrency in India. So, the government intends to bring in a law to regulate the space,” he said, on condition of anonymity.