India Considers Ban on Private Cryptocurrency Use
The possible outlawing of virtual coins would likely cover trading on exchanges and the use of those assets as a payment method, a government press release has indicated.
India’s central authorities are considering the imposition of a ban on cryptocurrency, according to a press release published by the central government’s Press Information Bureau (PIB) on Tuesday. The plan includes the prohibition of “private” virtual coins while at the same time encouraging the use of their underlying blockchain technology.
The PIB’s press release covered the outcomes of the nineteenth meeting of Financial Stability and Development Council (FSDC), chaired by the Finance Minister Shri Arun Jaitley. The main focus of discussion was the international and domestic situation and financial sector performance.
Moreover, one of the meeting’s topics was High-level Committee “deliberations” led by Economic Secretary Shri Subhash Chandra Garg to outlaw private digital currencies. Last year, the Finance Ministry set up a special interdisciplinary committee to analyze crypto in terms of existing laws. However, until this week, no indication had been given of a possible prohibition.
The language of PIB’s press release suggests that the ban would likely cover trading on exchanges and using virtual coins as a payment method, but did not indicate the government’s position about the holding of those assets.
Also, the term ‘private’ shows that state authorities do not want to prohibit central bank digital currencies (CBDC). Reserve Bank of India (RBI), the country’s central bank confirmed in August that it is working on a CBDC project.
“The Council also deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private cryptocurrencies in India and encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19,” the press release reads.
The FSDC meeting came several days after the country’s Supreme Court ordered the government to send its position about cryptocurrency as part of the legal battle between the central bank and several crypto companies over the RBI ban on domestic banks to provide services to digital asset firms.