It seems that the process of banning and authorizing encrypted digital currencies in India has not ended, after the long dispute over the decision issued by the Central Bank of India, which prohibits dealing with encrypted digital currencies and prevents its banks and financial institutions from dealing with them.

This decision was denied and removed by a ruling of the Indian Supreme Court last March.

But consultations and ban decisions are still in force between the parties of the government as the Indian government is looking to enact a law to ban cryptocurrencies, as the government considers that the legal framework is more effective than the circular issued by the Reserve Bank of India (RBI) in this regard.

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stated a report Issued by the “Economic Times” quoting a senior government official, who stated to the effect:

A note was transferred (by the Ministry of Finance) for interministerial consultations.

The impetus for the Cabinet memorandum draft was the March 4, 2020 Supreme Court decision that rescinded the April 2018 circular from the Central Bank of India that prevented banks from providing services to support cryptocurrencies.

According to the same source, in July 2019, a high-level governmental committee prepared a bill providing for the prohibition of all forms of digital currencies.

It has proposed a fine of up to Rs 25 crore and imprisonment of up to 10 years for anyone who deals with it.

But as we indicated last March, the Indian Supreme Court overturned the circular issued by the Central Bank.

The judges overseeing the case considered that providing banking services to those involved in trading or facilitating trading in virtual currencies could be set aside.

Whereas, according to what was issued by the Supreme Court at the session in which the decision of the RBI was overturned:

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When it is the consistent position of the RBI that they have not banned venture capital and when the Government of India cannot take a call though many committees make many proposals including two bills, both advocated completely opposite positions, it is not possible for us to However, to say that the contested measure is proportionate.

Many banking regulators from around the world are not comfortable with the idea of ​​cryptocurrencies.

The Indian government, especially the central bank, has expressed reservations about allowing digital currencies in the country.

In light of the risks and dangers associated with cryptocurrencies, the Indian government and the Federal Bureau of Investigation (RBI) have issued tips, press releases, and circulars to the public.

The RBI’s April 2018 statement said:

We have now decided to protect RBI regulated entities from the risk of dealing with entities associated with virtual currencies.

They are required to stop establishing a business relationship with entities dealing with virtual currencies immediately, and to dismantle the existing relationship within three months.

Virtual currencies, also referred to as cryptocurrencies and crypto assets, raise concerns about consumer protection, market integrity, and money laundering, among other things.

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This publication has been challenged before the Supreme Court by the Internet and Mobile Association of India (IAMAI) and a few other stakeholders.

Despite this emphatic warning, and at least three previous warnings by India’s central bank, first occurring in 2013 and twice in 2017, there are thousands of people lining up every day to sign up for cryptocurrency exchanges.

In 2017, the Ministry of Finance formed a multidisciplinary committee of nine members to study the global situation and propose measures to deal with these digital currencies.

The Minister of Finance announced in November 2017:

The government’s position is clear, we don’t recognize cryptocurrencies as legal tender yet.

On December 29, 2017, the Ministry of Finance issued an official press release warning people against “digital currencies.”

The same report issued by the Indian Ministry of Finance stated:

Cryptocurrencies are not backed by government orders, nor are they legal tender or even coins in the true sense, although they are called “digital currencies.”

Venture capital firms have no intrinsic value and are not backed by any type of asset, their prices are just a matter of speculation and there is a real and high risk of an investment bubble in this type of currency which is a form of Ponzi schemes.

By equating cryptocurrency with Ponzi schemes, the ministry warned people to avoid being entrapped and to note that digital currencies are often used to carry out disruptive activities such as drug financing and terrorism.

The Ministry of Finance also asserted in saying that venture capital firms do not have any regulatory authorization or protection in India, and that people should deal with them at their own risk, the warning was issued after seeking public opinions on the future of Bitcoin in May 2017.

So will the cryptocurrency in India end with the preparation of laws to kill it or is it purely consultations that may not come out in the negative way that many expect.

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