India is currently working on the bill that will regulate cryptocurrenc use but division appears as government departments have different opinions about whether or not crypto should be banned.
India is working hard on a cryptocurrency regulation bill. Reports say it is now drafted and in a consultation phase. According to different news outlets in the country, regulators are now divided and do not know if they will ban Bitcoin and other cryptocurrencies.
Sources practically said that the finance ministry is interested in regulating digital currencies. However, the Income Tax Department wants to ban crypto use as it is believed virtual currency regulation is close to impossible and black money use is promoted.
RBI was also listed as not being in favor of having virtual currency bans in place. Sources did highlight that the current bill form does propose virtual currency business bans. Exemptions might be present for crypto token issue.
The SIT (Indian Special Investigation Team) does want to ban Bitcoin use because it discovered 4 cases in which digital currency was being used to pay for drug related activities.
Experts Weigh In: Is An India Crypto Ban Feasible?
The private sector sees a really similar debate. A cyber law expert, Sarvesh Tyagi, declared that it is close to impossible for SIT to ban cryptocurrency use since banning is not a solution. He added that the solution is to create a proper regulatory authority. His extra words were:
“A blanket ban on the use of cryptocurrencies is not a very feasible solution as drug smuggling is a big problem, and in most cases, these transactions have nothing to do with the use of cryptocurrencies.”
The Position Of Indian Crypto Businesses
Obviously, crypto businesses do fight back, as they should. RBI did announce that payment gateways and banks controlled need to stop servicing the businesses that work with cryptocurrencies. Unocoin CEO, Sathvik Vishwanath, declared that banks already sent official notices to all exchanges, with 3 months being allowed for relationships to be ended. Challenging this order is possible in the Supreme Court and it is expected that Indian crypto businesses will form a consortium to do just that. Appeals already appeared, with Kali Digital Eco-Systems being just one example.