The Indian government is gearing up to ban digital currencies again. This time it will occur by introducing a new law, another local publication confirmed.
Citing an anonymous government official, Moneycontrol reported that the government has been consulting with the law ministry, ministry of information and technology, and the Reserve Bank of India (RBI) to draft a framework to ban cryptocurrency trading in India.
“There was a view in the government that banning it through a law would be more binding. It will clearly define the illegality of the trade. We have forwarded a note to related ministries for inter-ministerial discussions,” the official told the publication.
After the inter-ministry consultation, the bill will be sent for cabinet approval.
The High Court Ruled in Favor of Crypto
The Supreme Court of India lifted the ban on crypto trading earlier this year in a long court battle between the local cryptocurrency exchanges and the central bank. Though the use of cryptocurrencies was not illegal in the country, the monetary regulator restricted banks under its purview to offer banking services to crypto exchanges.
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The regulator’s harsh action also forced many well-established local crypto exchanges to either shutter their services or move their base overseas.
Amid the landmark court judgment, the trading volume of the Indian crypto skyrocketed. Recently, many foreign crypto companies have been entering the Indian market.
Notably, there is no supportive voice from the Indian lawmakers towards Bitcoin or other digital currencies. However, many were hailed for their contribution to the blockchain technology.
Similar reports of the Indian government’s preparation for a law banning cryptocurrencies were also made in the past, but no official details are out yet.
Meanwhile, a panel formed by the Indian government to study the cryptocurrency market recommended a $3.3 million fine and up to 10 years imprisonment will be imposed on anyone dealing with digital currencies in the country.