The Government of India May Completely Outlaw Cryptocurrencies

The Government of India May Completely Outlaw Cryptocurrencies

April 29, 2019 Editor's Desk

According to certain reports, it’s suggested that the government of India may completely outlaw cryptocurrencies. A report from the Economic Times, many of the government departments are in favor of a complete ban on issuance and trading of cryptocurrencies and this confirmed by anonymous “government officials aware of details”.

According to these officials, government departments like ​The Department of Economic Affairs (DEA), Central Board of Direct Taxes, Central Board of Indirect Taxes and Customs and the Investor Education and Protection Fund Authority are all in favour for this ban.

Even a draft bill, named as “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019,” has been shared with certain departments of the government according to reports. But it’s still not clear that what “official digital currencies” stands for, as the Reserve Bank of India was also researching launching a digital rupee.

According to sources, the final bill is expected to be proposed to the next government favor after the national elections.

Reports suggest that the Ministry of Corporate Affairs​ ​has provided feedback to DEA arguing that most of the cryptocurrencies are run as Ponzi schemes to defraud investors. The ministry has suggested a cryptocurrency related prosecution under the country’s Prevention of Money Laundering Act for the time being.

Anurag Agarwal, CEO of Investor Education and Protection Fund says that IEPFA has taken a stand and it thinks that cryptocurrency is a Ponzi Scheme and should be banned.

India has been waiting a long time to make a decision on the legalities of cryptocurrencies. In April 2017, the government set up an interdisciplinary committee to investigate the issue, which was said to be discussing imposing a ban on “private cryptocurrencies” last October. However, the committee was then not in favour of an outright ban but was rather considering possibly legalizing cryptocurrencies with tough rules attached.

A large number of cryptocurrencies exchanges in the country have filed legal petitions to overturn RBI’s ban, the Supreme Court is yet to make a judgement on it. The next hearing is scheduled in July.

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