Proposed crypto ban legislation under review by India’s government

The government of India is reportedly reviewing modalities whether to ban or regulate cryptocurrencies in the country.

Proposed crypto ban legislation under review by India’s government

According to a report by Bloomberg Quint, the government is in talks with financial regulators and industry stakeholders to examine the provisions of an earlier proposal that effectively called for a blanket prohibition of crypto in India.

Back in February, reports from India feared the market following a possible crypto ban which, however, has failed. Instead, the authorities are now considering a more nuanced approach towards cryptocurrency regulations.

An anonymous source said to Bloomberg Quint that current discussions are going over the clauses in the previous crypto ban bill to determine whether to follow through or seek an alternative approach.

These discussions are proceeding along three fronts. The first two are around whether crypto can be regulated or if the government should wield the ban hammer. The third issue though is reportedly ascertaining the types of crypto activities that could be permitted under a standardized cryptocurrency regulatory paradigm in the country, according to the publication.

Read: India’s Enforcement Directorate issued show-cause notice to WazirX exchange

However, The Reserve Bank of India (RBI) continues to maintain its anti-crypto stance with the RBI previously said that it has communicated its reservations about cryptocurrencies to the federal government. Back in May, the Reserve Bank clarified that commercial banks were not under orders from the central bank to deal with crypto exchanges. 

Indeed, India’s Supreme Court in March 2020 overturned a previous RBI mandate prohibiting banks from servicing exchanges in the country.

The source added that the amended crypto bill is unlikely to be introduced during the upcoming monsoon session of parliament beginning in July.

Meanwhile, three major cryptocurrency exchanges including Kraken, Bitfinex, and KuCoin are reportedly expanding their business in India to offer services to the country’s estimated 15 million crypto investors.