The Indian government is reportedly planning to ban cryptocurrencies after all.
New reports of the ban have re-emerged after the country’s finance minister recently said a “calibrated” position will be taken on cryptocurrencies.
On Monday, Reuters, citing a “senior government official,” who has “direct knowledge of the plan,” reported that India will propose a law banning cryptocurrencies in almost all forms, including trading, holding, and mining.
The report comes shortly after recent comments made by India’s finance minister Nirmala Sitharaman, who said: “We are not closing our minds. We are certainly looking at ways in which experimentations can happen in the digital world, in cryptocurrency, and so on.”
These comments gave hope to India’s crypto businesses at the time, although the finance minister did not detail what kind of experiments will be allowed.
In a new interview with India Today on Sunday, Sitharaman provided further details. She said experiments around blockchain technology would be allowed.
“We will allow a certain amount of a window for people to use so that experiments in blockchain, bitcoin or whatever you may want to call it the cryptocurrency experiments, and fintech which depend on such experiments will have that window available for them,” said Sitharaman. “We are not going to shut it off all.”
The government official quoted in the Reuters report also said: “We don’t have a problem with [blockchain] technology. There’s no harm in harnessing the technology.”
As for cryptocurrencies, Sitharaman in the India Today interview said, “a cabinet note is getting prepared. It’s almost nearing completion, and then it will be taken to the cabinet.”
It remains to be seen what the note or the proposed law will contain.
The Reuters report further said that penalties would be levied if investors won’t liquidate their investments within a grace period of up to six months. Previous ban reports also noted that three-to-six months grace period would be given to investors for exiting their crypto investments.
If the ban is enacted, Indian crypto businesses will have no other option but to shut down. But executives of Indian crypto exchanges recently told The Block that they are hopeful the government will not take such a harsh decision.
Yet, they are preparing for the worst-case scenario. Some executives said they would relocate, while others said they would fight with the government in India’s Supreme Court if the ban takes place.
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