After a thousand speculations and several months of expectations, the Indian crypto dream is finally coming to a dead end. The Lok Sabha, the lower house of the Parliament has introduced a bill to ban cryptocurrencies, incorporating a prison term of up to 7 years.
The bill, titled ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019′, is based on the suggestions of the inter-ministerial committee formed to study and give an opinion on digital currencies. The bill has been finally made official after months of speculations.
However, the bill doesn’t come as a surprise to the industry experts, as authorities have adopted a strict stand against crypto. In April 2018, the Reserve Bank of India (RBI) had released a circular barring commercial banks in the country from catering to crypto-related businesses, which was implemented in July last year. Since then, several crypto companies had to shut down their operations due to lack of banking services.
The Supreme Court also intervened in the matter, which gave some hope to the industry stakeholders; however, the new bill has killed all hopes. Experts across the globe have been criticizing Indian authorities for banning crypto. Be it billionaire investor Tim Draper or Computer Scientist John McAfee, the world has spoken against banning or regulating crypto.
Earlier in the week, it appeared that the inter-ministerial committee had suggested a total ban of crypto and a 10-year prison term for defaulters. The committee had also suggested the government, along with the RBI, should introduce a regulated digital currency, a suggestion which has also been incorporated in the bill draft.
Though it might sound a bit too harsh on businesses, India is not a country with cyber and digital security infrastructure as strong as, say, the US or the UK. Moreover, the percentage of people using digital modes of transactions in India is far less than compared to developed countries, which makes a large portion of the population vulnerable to fraud, like the BitConnect one in Gujarat.
So, is the government’s decision right to ban crypto? Well, at best, we can say, it’s complicated.