- Indian Government agencies are deliberating to submit a draft bill for Banning Cryptocurrencies and regulating official Digital Currencies.
- Media reports say departments like CBDT, MCA, DEA want a ban on sale, purchase and issuance of crypto currencies.
- A final law (for banning) will be proposed to the next Government.
How I had dreamed of going for Avengers End Game in the morning today, instead now I am sitting here trying to understand how is it that after 1.5 years of deliberation on crypto assets, the Garg Committee still wants to Ban Crypto assets in India?
Two separate media reports published on the same day by ET and the BusinessLine state that government departments aren’t keen on allowing cryptocurrencies to be freely traded in India. They propose a complete ban on cryptocurrencies like Bitcoin, Ethereum, etc. But if we really dig deeper, can we find real substance behind these claims?
The Discussion of Draft for Ban on Crypto and its proposal to Government
As much as it is easy to write headlines like “Final Nail in the coffin for Crypto in India”, there is a lot more to the crypto banning headline than what meets the eye.
The Inter departmental committee setup under Subhash Chandra Garg in December 2017 had a meeting to discuss the future of crypto currencies in India according to the report on ET and BL. Both report says the Investor Education and Protection Fund (IEPF) Authority has recommended a ban on cryptocurrencies in India.
Some other agencies like the Department of Economic affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) have endorsed the idea of a complete ban on the “sale, purchase and issuance of all types of cryptocurrency” according to the sources in the ET report.
Now, a draft bill under the title “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ draft has been circulated to relevant government departments”, as per the ET report.
So basically, everyone met, said we must ban crypto, wrote a draft bill, circulated internally and now are sitting and waiting for the next government to take charge so they can propose it.
What is Regulation of Official Digital Currencies?
On one end the report talks about government officials wanting a complete ban of sale, purchase and issuance of crypto assets but on the other hand, add to the title of draft bill – “Regulation of Official Digital Currencies”.
This leads me to ask, “Are the departments proposing creation of sovereign backed digital currencies?” The question currently remains unanswered.
However, we have already filed an RTI to relevant departments and will update our readers as soon as we have an answer.
What if Crypto Trades are Banned?
Cryptocurrencies such as Bitcoin, Ethereum, Litecoin etc are fully decentralised in nature. No single person, company or government can control it. But, a government can ban sale, purchase and issuance of new cryptocurrencies like ICOs, IEOs, etc.
Exchanges like Koinex, WazirX, Bitbns, and others registered in India will have to register abroad or shut down the exchange. Traders will still find a way to trade on exchanges residing outside of India. Exchanges like Coinbase, Binance, Okex, Bithumb, are doing their bits to woo Indian users.
Banning Porn websites educated users to use VPN. What will stop traders from using one to trade crypto assets? Perhaps, people like me will stop wearing T-shirts that say I believe in Crypto. Or worse, because I am publicly known, and many other youtubers and news folks, we will have to liquidate our crypto assets to keep reporting crypto news freely without the fear from government.
Those investing and trading cryptocurrencies will find a way. So banning isn’t the solution for curbing frauds and scams, regulating it properly with strict punishments for fraudsters is, in my opinion. Banning will not be as effective as these departments are hoping for, if they are planning that is. We are currently relying on news from sources that do not wish to be named.
Historically, these news have been debunked almost every time by Coin Crunch India with proper evidence.
Prevention of Money Laundering Act
Another interesting thing from the ET report is how the ministry of Corporate Affairs recommended that individuals using cryptocurrencies to defraud investors and launder money be prosecuted under the Prevention of Money laundering Act till a detailed bill is brought.
Does this really mean that we have no law right now that can prosecute Ponzi Scheme dwellers? Of course not. They can be prosecuted even now, case in point Amit Bhardawaj. My point is, there is law for people defrauding people, why bring in Crypto and make it specific? If a suspect committed fraud, prosecute them, I don’t think we need new laws for crypto frauds, certainly not a ban.
Just Stay Calm and Wait
Look, these reports come and go. Economic Times, CNBC, Businessline, and many other media houses have published several contradicting reports on Crypto regulations themselves over time.
Unless the government confirms, nothing is confirmed. Take each news with a pinch of salt. As of now, cryptocurrencies or crypto assets aren’t illegal to purchase, sell or possess. So go on with your day like any other day.
Go watch End Game.