Prashant Phillips Shares a Quick Byte on Laws to Ban Cryptocurrency Trading
Earlier this year, the Supreme Court had struck down the RBI’s ban which restricted banks from providing services to businesses dealing with cryptocurrencies. The Hon’ble Court while striking down the order, had held the RBI’s directive as disproportionate. The lifting of the supposed ban led to a resurgence in the trading of cryptocurrencies in India.
The Government has always been reserved about allowing cryptocurrency in India. Last year, the Finance Ministry had proposed the ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’ which made banning the use of cryptocurrency in India a punishable offense. Reportedly, the Government of India is now planning to introduce laws that will ban cryptocurrency trading in India. The Government while maintaining their position, have contended that trade in cryptocurrency is likely to cause harm if not regulated. Any further movement on this basis may be challenging as the SC had noted that no harm had been shown to have been caused to the RBI regulated entities, such as banks.
As of now, there is no formal notification released by the Government, so it would be difficult to comment as to what the future of cryptocurrency in India will be like. Considering the views of the Hon’ble SC, it is possible that the said legislation may (and it perhaps should) focus regulating cryptocurrencies rather than banning them absolutely in India. Since India has been advocating the use of blockchain (on which cryptocurrency is implemented), it is likely that any legislation will seek to regulate rather than ban cryptocurrency in India.