India is planning to introduce a new law banning trade in cryptocurrencies. The bill is expected to be discussed shortly by the federal cabinet before it is sent to parliament. However, the federal government will encourage blockchain, the technology underlying cryptocurrencies, but is not keen on cryptocurrency trading.
“If India passes the proposed banning of cryptocurrency trading, it will, of course, have an impact on the industry as a whole, however, this is not the first time a nation has announced a ban on Bitcoin and cryptocurrency trading,” said UK based crypto exchange CoinCorner CEO Danny Scott.
Back in 2017, China announced the forced closure of all Bitcoin exchanges operating in the country, in an attempt to ban Bitcoin-related activities. However, China has since “backtracked” on the ban, stating in a report by the Beijing Arbitration Commission (BAC) that, “the state does not prohibit Bitcoin’s activities as virtual commodities, except for the activities that Bitcoin is engaged in as legal tender.” “I wouldn’t be surprised if India were to follow suit,” added the CEO.
“Although any ban on cryptocurrency trading has an effect on the industry – especially one that impacts big markets like India and China – the crypto market is maturing and we are seeing that these bans are having less of an impact globally on the industry.
“Of course, this announcement will be a blow to India locally, and also to exchanges with their primary focus in this territory, however this is not the first time India has faced challenges in regards to cryptocurrency restrictions,” went on saying Danny Scott.
In April 2018, the Reserve Bank of India (RBI) banned domestic financial institutions from providing banking services to crypto exchanges. The ban was overruled in March this year and the Indian crypto sector recovered quickly, with crypto trade volumes reportedly soaring in the following months.
“In my opinion, I think India should reconsider the ban and instead look to introduce a regulatory framework around the cryptocurrency industry, like so many other countries have successfully done,” ended Danny Scott.