Celebrations over the supreme court dismissal of the RBI-induced crypto ban could be short-lived as the country is working towards officially banning the use of private cryptocurrencies in the region, according to fresh reports.
A shortlived happiness
After the Supreme Court (SC) lifted the RBI ban in March, the entire crypto space was basking in excitement, thinking it was another win for the industry.
At that time, the SC was quoted saying “While we have recognized… the power of RBI to take preemptive action, we are testing in this part of the order the proportionality of such measure, for the determination of which RBI needs to show at least some semblance of any damage suffered by its regulated entities. But there is none.”
However, India is planning to introduce a new law to place a long-lasting ban on crypto assets in the country. A senior government official said in a report today that the finance ministry had sent a note for inter-ministerial consultations, as the government considers a legal framework to be more effective than a circular from the Reserve Bank of India (RBI) on the issue.
10 years in prison
According to the unnamed official, the note will be sent to the cabinet after consultations, after which it will be sent to the parliament. He said that the law would deal a blow to crypto investors, exchanges, and entities that are trading in cryptocurrencies if the note has similar lines as an earlier proposal.
In July last year, a high-level government panel proposed in a draft law that all kinds of private cryptocurrencies should be ban. The bill further suggested a fine of up to Rs 25 crore and imprisonment of up to 10 years for anyone who violates the law.
Just another FUD?
Although the founder and CEO of Indian crypto exchange WazirX, Nischal Shetty, said that the whole thing is uncertain and just another FUD, the draft law noted that any direct or indirect use of cryptocurrency will be punishable with a fine or imprisonment, which shall not be less than one year, but may extend up to 10 years.
Amit Maheshwari, a stakeholder and partner at AKM Global hopes that the government will conduct a stakeholder consultation and not proceed with the plan.
“The draft rules in the July 2019 proposal were too harsh, said one of them. Such proposed legislation would make it “illegal to hold, sell, issue, transfer, mine or use cryptocurrencies and, if passed in the current form, would completely decimate the crypto-industry in India,” he said.