Lawmakers in India are mulling a ban on cryptocurrencies.
That’s according to a report published this Friday by The Economic Times, a local outlet based in Mumbai.
Government officials told the outlet that a new draft law – the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ – has been passed to politicians.
Several government bodies in the country, including the Department of Economic Affairs and Central Board of Direct Taxes, have said that the sale, purchase, and issuance of digital assets should be banned.
Indian government officials have been looking at cryptocurrency for years.
Back in November of 2017, a panel was set up – led by the country’s economic affairs secretary Subhash Chandra Garg – to look at the potential impact digital assets could have on the Indian economy.
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Protecting the rupee
In February, reports emerged that the committee had concerns about the impact cryptocurrencies could have on the rupee, India’s national currency.
Like the Chinese, Indian authorities take a very hard line on anything that can devalue their currency.
For instance, aside from some authorized businesses and money exchanges, it’s illegal to pay for goods and services in foreign currency.
Last year, the Central Bank of India effectively banned banks from doing business with companies dealing in cryptocurrencies.
Documents allegedly seen by The Economic Times indicate that a ban on cryptocurrency will be done under terrorism financing laws. Authorities may also use Anti-money laundering or fraud legislation in the country.
Indian authorities often justify their foreign exchange laws by citing anti-terrorism laws.
Any legislation will have to wait until at least the end of May. India, the world’s largest democracy by population, is in election season and a new government may take power next month.