Despite an earlier statement from India’s Minister of State for Finance that the government wasn’t planning on banning cryptocurrencies, the Inter-Ministerial Committee (IMC) is proposing otherwise. According to the IMC report on July 22, 2019, the committee recommended a blanket ban on cryptocurrency and also penalties for conducting virtual currency activities in the country.
India Bitcoin Ban Imminent?
The recent report from the IMC would not go down well with the crypto community in India. After months of speculation on digital currency ban, the IMC submitted its report along with a draft bill, suggesting that the government place a ban on bitcoin and other cryptocurrencies.
An excerpt from the report reads:
“As for private cryptocurrencies, given the risks associated with them and volatility in their prices, the Group has recommended banning of the cryptocurrencies in India and imposing fines and penalties for carrying on of any activities connected with cryptocurrencies in India.”
The group’s suggestion to fine and penalize individuals/groups involved in crypto trading is similar to an earlier report which called for a 10-jail term for persons dealing in bitcoin or other virtual currencies.
Back in 2017, the government set up the IMC to look into cryptocurrency activities and come up with a suitable proposition regarding the industry. Based on the recent report, the IMC also recommended that the government set up a “Standing Committee” to look into the issues raised in the report.
Also, while suggesting a ban on cryptocurrencies, the group asked the Indian government to remain open-minded concerning plans to create an official cryptocurrency.
India Chooses Blockchain Over Bitcoin
However, the Committee is in support of the use of blockchain technology in the country, stating that the technology can help the Indian government detect fraud. Also, mainstream financial systems can apply DLT for collateral management, loan-issuance tracking, among others.
Issues regarding cryptocurrency in India has been shrouded in uncertainty for a while, and the government’s attitude towards the virtual currency sector has not helped matters.
Since the RBI ban in 2018, cryptocurrency exchanges have shuttered their services in favor of friendlier jurisdictions, with Cryptokart being the latest exchange to exit India.
Although the government would further scrutinize the report and draft bill and come to a final decision, the proposed ban could see the imminent death of cryptocurrency exchanges in the country.