Despite the advancement in technology, India’s crypto space is unstable. The country has mulled over the prospect of a blanket ban on digital assets for a while. Even a recent reversal hasn’t especially helped to sway fears.
An old Enemy Returns?
Earlier this week, Ashish Singhal, the founder and chief executive of Indian cryptocurrency exchange CoinSwitch, spoke with Cointelegraph over the rumors that the Indian government might be considering another blanket ban on digital assets.
In the interview, he explained that the chances of such happening were much lower, considering the events that have unfolded in the industry over the past few months. Many in the Indian crypto space were on edge once more after the Economic Times of India reported that the country’s Ministry of Finance had proposed a draft bill that will ban digital assets.
Citing a senior government official, the news source explained that the Finance Ministry would send its proposal to the Union Council of Ministers. Then, it would forward the bill to the Indian parliament for a final review.
Last year, a high-end government parliament, with the leadership of former Indian Secretary of Finance Subhash Garg, drafted a bill to place a ban on cryptocurrencies. Titled “Banning of Cryptocurrency & Regulation of Official Digital Currencies,” the bill proposed that crypto users get a 10-year jail term and an optional fine of up to 25 crore rupees ($3.2 million).
Have Times Changed in India?
The bill would have primarily made it illegal for anyone to “mine, generate, hold, sell, deal in, issue, transfer, dispose of or use cryptocurrency” in India. However, no one heard anything about the bill for months, leading many to believe that it had died a quiet death in the country’s legislative houses.
However, the fact that something similar is now resurfacing is causing investors a great deal of anguish. Despite all of this, Singhal remains resolute in his belief that no such law will pass in India’s parliament. Speaking with Cointelegraph, he explained that when the original bill was proposed, there was no support for cryptocurrencies in the Reserve Bank of India. There was also a banking ban in place already, which made it impossible for crypto companies to access banking services.
As he explained, all of these made the possibility of a ban very likely. However, things are much different now. The Indian Supreme Court overturned the Reserve Bank’s ban earlier this year, essentially opening the floodgates for financial institutions to serve companies in the crypto space.
“Right now, the proposed draft bill has a low probability of passing. There are smart people in the government who would take the right steps forward rather than just banning cryptos altogether,” Singhal added.
Singhal does have a point. Under the law, cryptocurrencies are allowed in India, and banks can work with crypto companies. However, several of these crypto companies have complained about still being blacklisted despite the law being passed.
While the prospect of such a law passing might be low, legislations move rather quickly in a country like India. The Reserve Bank’s initial blanket ban caught everyone by surprise—another ban would be damaging to the sector.