Indian government mulls ban on use of cryptocurrencies

The Indian government is considering imposing a complete ban on cryptocurrencies in the country, while it seeks to encourage the use of underlying blockchain technology.

At a recently held meeting of the Financial Stability and Development Council (FSDC) – an apex-level body constituted by the government of India, Finance Minister Arun Jaitley reviewed the current global and domestic economic situation and financial sector performance.

Among other things, the council focused on the burning topic of cryptocurrencies. According to details on the government’s Press Information Bureau (PIB):

“The Council also deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private crypto currencies in India and encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.”

According to Crypto Kanoon, the word “use” in the above statement may relate to a ban on the buying, selling, transacting, or conversion of cryptocurrencies into rupees but not their possession, Quartz reported.

In April, the Reserve Bank of India (RBI) banned the entities regulated by it from engaging with any individual or businesses involved with digital currencies. In a bid to comply with the RBI’s ban, banks forced exchanges and traders to stop using their accounts for cryptocurrency trading, who, in turn, approached the Supreme Court of India.

After a delay of over a month, the apex court finally took up the case last week and gave a two-week deadline to the government to submit a report on the findings of the crypto-focused committee it had established.

The government, however, is highly optimistic about blockchain technology with Prime Minister Narendra Modi encouraging the technology’s adoption across industries.