The Indian government will discuss a bill to ban crypto in India during the ongoing parliament session. As the lawmakers gather together for the monsoon session of the parliament, the country faces various issues such as GDP downturn, a surge in Coronavirus cases, and border disputes with China. Amid such an important session, crypto does find a mention.
The bill to ban crypto in India, if passed, will put the country opposite to other Asian nations which seem to embrace crypto, albeit with regulations. In contrast, the central government wants to encourage blockchain-based technologies, research, and innovation. Back June, rumours started floating that the finance ministry is undertaking inter-ministerial consultations to ban crypto in India.
Lawmakers set to take the legislative route to ban crypto in India
In 2018, the Reserve Bank of India, the country’s central bank, put a blanket ban on cryptocurrency operations in India. Subsequently, a case was filed by various crypto exchanges in the Supreme Court against the arbitrary order passed by the central bank. After a long legal battle spanning almost two years, the apex court ruled in favor of the crypto exchanges and lifted the ban.
The judgment sparked a new wave of interest in cryptocurrencies resulting in a massive surge in cryptocurrency trading. Paxful stated that its Indian operations reportedly grew by 883 percent in the period from January to May 2020. WazirX, an India-based crypto exchange, reported 400 percent growth in March 2020 alone.
Indian government flip flops on crypto
The bill to ban crypto in India comes at a time when most nations across the globe are looking to regulate cryptocurrencies and take advantage of the next-gen payment systems. Many nations are debating crypto policies, regulations, and even taxes. Recently, India’s arch-rival China allowed Bitcoin to trade as virtual property. Most importantly, China’s central bank digital currency reflects the country’s determination to adopt a crypto framework for future payments. Singapore and South Korea also follow progressive crypto policies.
The decision to ban crypto in India can negatively impact approximately 1.7 million local crypto traders. The Supreme Court judgment gave a boost to the crypto startup scene. Investments into digital assets and crypto startups grew after the ban was lifted in March 2020. For example, CoinSwitch started operations in June and soon enrolled more than 200,000 Indian users resulting in $200 million worth of trading volumes. Such unicorns face an immediate threat in case the bill to ban crypto in India is passed by the lawmakers.