Centre may bring in law to ban cryptocurrencies in India: Report
RBI’s 2018 circular prohibited banks and financial institutions from dealing in or providing services related to cryptocurrencies
June 12, 2020 / 09:41 PM IST
The Centre is planning to introduce a law to ban cryptocurrencies in India, The Economic Times reported. This follows the Supreme Court's March 4 order setting aside the Reserve Bank of India's (RBI) 2018 circular prohibiting banks and financial institutions from dealing in or providing services related to cryptocurrencies.
The central bank, in April 2018, gave a three-month notice to the banking sector to halt its involvement in cryptocurrency transactions, a move that impacted thousands of crypto-traders in India.
A draft cabinet note for inter-ministerial consultations has been moved to this effect, the article quotes an official as saying.
Meanwhile, experts told the paper that if the current Cabinet note is similar to the July 2019 draft proposal for a ban on cryptos, the move could have a serious impact on investors, exchanges and other stakeholders.
Also Read | Crypto business takes off but industry still waiting for regulations
In 2019, a draft proposal was put forth by a high-level panel of the government that sought a ban on all different forms of cryptocurrencies in India. It called for a jail term of up to 10 years or a maximum fine of Rs 25 crore for anybody found dealing in cryptocurrencies in the country.
Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.
An increasing number of investors took to crypto trading in the past few months as share markets and traditional assets took a beating amid concerns over the economic impact of the coronavirus pandemic.
Moneycontrol has reported
earlier in May that in addition to the old exchanges that were lying low after the RBI's April 2018 circular, new ones also came up as the business witnessed a boom.