Indian Government may issue new Crypto Ban in two months

India has banned cryptocurrencies in the country since July 2018 as the RBI had imposed a prohibition. However, the Supreme Court of India invalidated a blanket ban on banks dealing with crypto businesses in March 2020. After that, new exchanges positively bloomed across the country.

Many parts of India still abide by restrictions on movement. This is due to the Covid-19 pandemic as the authorities ordered a lockdown in March. But during these five months, crypto exchanges reported strong growth in the country, as some traders moved away from traditional assets.

Nonetheless, it seems that the Indian government changed its mind once again. An official stated recently that the authorities are considering a new law to ban cryptos.

The Reserve Bank of India is actively working along with two ministries on a legal framework to ban digital coins on the subcontinent – noted the Indian government official.

The CEO of Indian crypto exchange CoinSwitch, Ashish Singhal, has declared that the chances of authorities imposing a new blanket ban on digital currencies were more likely in 2019 than this year. He believes that there has been a change in how people perceive cryptocurrencies in India, hopefully for the better.

However, the Indian website, Moneycontrol, also said that their government is making preparations to pass a law banning crypto trading. According to the source, consultations between the Reserve Bank of India, the Ministry of Law and Justice, and the Ministry of Electronics and Information Technology had begun to determine the framework of such a law.

When will the government issue the new law?

Initiators plan to get the law ratified once Parliament resumes for the session. It will probably happen in late August or early September. However, this time, the government is considering banning digital coins through legislative change, as it would be more binding. 

Previously, the authorities used methods such as the blanket ban from the RBI for banks dealing with crypto companies. However, the new method will define the illegality of the trade more clearly.