Report: India Considers Complete Ban on Digital Currencies

A draft bill that would outright ban cryptocurrency is reportedly circulating among various departments of the Indian government, local media outlet The Economic Times reported on April 25.

An official familiar with the matter reportedly told the Economic Times that the government has begun inter-ministerial consultations on the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019" draft bill.

A committee consisting of the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA), among others, has reportedly supported the idea to completely ban the “sale, purchase and issuance of all types of cryptocurrency.”

The committee is reportedly also considering an option to ban digital currency under the Prevention of Money Laundering Act (PMLA) since it could purportedly be used for money laundering. The Ministry of Corporate Affairs reportedly stated that cryptocurrencies are used in fraudulent schemes to “defraud gullible investors”.

The Economics Times’ report runs contrary to reports from December, which stated that a different governmental committee suggested that cryptocurrencies should be legalized in the country, and stressed that there is a general consensus that cryptocurrency cannot be dismissed as completely illegal.

In February, the Supreme Court of India granted four weeks to Indian authorities to come up with cryptocurrency regulation policies, before the Court would stop hearing crypto-related cases, including parties who demand to reverse the crypto circular released by the Reserve Bank of India.

That same month, a panel led by Indian Economic Affairs Secretary released a report raising concerns about the impact of cryptocurrencies on the local fiat currency in the case of crypto being adopted for payments.