While there continues to be speculation about a possible bitcoin ban in India, a senior government official has come out to say there is no such law for cryptos in the country. Meanwhile, there are reports that a committee formed by the government to look into potential virtual currency laws is yet to make significant progress on the matter.
Commentators within and outside the country say it would be foolhardy for the government to place a blanket prohibition of cryptocurrencies in India.
No Separate Law Dealing Bitcoin and Cryptos in India
Anurag Thakur, the Indian Minister of State of Finance and Corporate Affairs says there is no law instituting a bitcoin ban in India. Commenting on the issue, the minister said:
“Presently, there is no separate law for dealing with issues relating to cryptocurrencies. Hence, all concerned Departments and law enforcement agencies, such as RBI, Enforcement Directorate and Income Tax authorities, etc. take action as per the relevant existing laws.”
Explaining further, Thakur said that the only government actions being taken at the moment remain restricted to the issuing of advisories and press releases to the public. Also, law enforcement and the police are responding to crypto-related issues that intersect with the country’s criminal code.
This admission by the minister comes at a time when rumors are swirling of a possible blanket crypto ban in India. As previously reported by Blockonomi, a leaked document making the rounds on social media in the country revealed plans by the government to institute a total bitcoin ban.
Part of the bitcoin ban rumor also includes a possible prison sentence for people caught engaging in crypto transactions. Such a measure would place India as arguably the harshest anti-crypto government in the world.
Yet to Make Progress on Crypto Laws in India
The Minister of State for Finance also revealed that a government committee tasked with looking into the matter of creating laws for the crypto industry has submitted its report. Among the key issues expected to be examined in the report include crypto trading.
There is however no specific timeline for when such a regulatory framework would become a reality in the country. India has consistently shown an inability to provide positive clarity for virtual currency governance.
In the absence of any concrete government policy, the de facto regulation in the country appears to be the ban placed by the Reserve Bank of India on bitcoin exchanges receiving banking support.
Banks by themselves have also prohibited customers from engaging in crypto transactions. There are reports of commercial banks terminating the accounts of users found to be dealing in bitcoin and cryptos in general.
India May Regret Bitcoin Ban
One of the arguments in favor of a bitcoin ban in India is the preservation of rupee monopoly in the country. Crypto critics say virtual currencies can dilute the influence of the rupee thus negatively the ability of the country to maintain total internal capital controls.
On the other side of the aisle, crypto proponents say a bitcoin ban will be a foolhardy decision. With other countries taking steps to adopt cryptocurrencies, a prohibition could see India falling behind in the landscape of the emerging global digital economy.
Several bitcoin exchanges have already terminated their operations in the country citing the unfavorable regulatory environment. Some like ZebPay have moved their business to places like Malta and Australia.
Earlier in July, Blockonomi reported on Kunal Barchha, the CoinRecoil founder expressing his displeasure at the negative attitude of Indian authorities to cryptocurrency.
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