It has been revealed that India’s Federal Cabinet is discussing a bill which will completely ban cryptocurrency trading, and this bill will be passed to the Parliament soon. Although nothing is set in stone, the future of cryptocurrency in India is looking grim, especially since India’s government has a strong anti-crypto stance and therefore it would be a miracle if this bill is not ratified into law.
Indeed, it has been a rough ride for cryptocurrency in India. In 2018 the Central Bank of India made it illegal for banks to facilitate crypto activity, meaning crypto exchanges and crypto traders could not use banks for crypto related transactions. Without banks centralized crypto exchanges couldn’t function, and all of the centralized crypto exchanges in India collapsed or fled the country.
Despite the banking ban, cryptocurrency hung on strong in India, and a huge peer to peer crypto trading market arose. Further, in March of this year the crypto banking ban was deemed unconstitutional by the Indian Supreme Court, since the Central Bank of India does not have the authority to institute such a ban.
In the 6 months since the Indian crypto banking ban was overturned, the crypto industry in India has flourished, with trading volume increasing by hundreds of percent.
However, it appears India’s crypto industry may be facing a permanent death knell with this upcoming trading ban. Unlike the banking ban where peer to peer crypto trading was still legal, if this crypto trading ban is passed even peer to peer crypto trading will be illegal.
Once again, it remains to be seen what will happen in the end, and undoubtedly the crypto industry in India will battle as hard as they can to prevent this ban. That being said, it seems to be a losing battle for the crypto industry in India, since the government has strong motives for banning crypto, such as increasing control over its citizens and preventing capital outflows in order to strengthen the Indian Rupee.