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2 June 2023
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India considers a blanket ban on cryptocurrencies

  • The Ministry of Finance issued a note with the proposal to ban digital assets.
  • The industry experts say no need to panic as yet.

India intends to completely ban cryptocurrency, the local media outlet The Economic Times reports citing a senior source in the government of the country.

In March, the Supreme Court of India cancelled the order of the Reserve Bank of India, which prohibited financial institutions from servicing companies engaged in the cryptocurrency industry. Despite the legal thaw, the country’s Ministry of Finance issued a note for inter-ministerial consultations with a proposal to ban digital assets out of circulation in the country.

After the internal deliberations, the proposal may be submitted to the parliament. Once approved, it may hit all industry players including investors, exchanges and companies dealing with digital assets.

A year ago, a government commission prepared a draft law banning cryptocurrency. It was proposed to impose fines of up to $330,000 and prison sentences of up to 10 years for their use.

Leading cryptocurrency experts in India expressed doubts that the new initiative would be just as prohibitive. Nishal Shetty, CEO of WazirX, one of the largest bitcoin exchanges in the country, urged not to give in to panic. He believes that the Prime Minister will not “slow down the development of the booming sector”. He also mentioned that there was a big gap between a note for inter-ministerial consultations and an actual law.

Yet another FUD is here. Few things to note: 1. Its just a note 2. The committee will need to be formed 3. Draft needed 4. Industry consultations 5. Parliamentary approval I’m confident our PM will not stop a booming sector, he wrote on Twitter.

The lifting of the ban on banking services had a positive impact on the cryptocurrency industry in India. The largest exchange CoinDCX reported that since March their trading volumes have increased by 47% and the number of active users grew by 150%.

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