India to enforce crypto ban again or is it just baseless FUD?

  • A recent Economic Times report suggested that Indian lawmakers are planning to reimpose a ban on crypto firms.
  • Crypto community members in India said that the rumors of the ban might be a bit premature. 
  • As the sources cited in the article are not reliable, the accuracy of the news remains ambiguous

In a recent article, the Economic Times (ET), an Indian news site, suggested that the lawmakers in the country were planning on imposing a new ban on crypto firms. The article cited an anonymous “senior government official” who told the ET “A note [presumably on crypto] has been moved (by the finance ministry) for inter-ministerial consultations.” Crypto exchange founders and startup CEOs working in the sector said that these rumors might be premature.

The article did not provide any additional information on what the note could be but says it was spurred on by the Supreme Court ruling. The latter had earlier allowed financial institutions in India to provide services to crypto exchanges and firms. The ET article said that the government could lean on a previous government draft law (from July 2019), which banned all crypto and proposed ten years’ imprisonment for anyone caught holding them.

Crypto-associated members in India seem not to agree with the report in question. Nischal Shetty, the founder and CEO of WazirX, a local exchange, said: 

This is all leaked information. There is movement for sure, but no one has been able to get clarity on whether it specifically talks about a ban, or whether it talks about just moving forward with regulation. There are a lot of assumptions.

According to Shetty, the Finance Ministry is consulting with other government departments to discuss what the next regulatory step should be. 

I’ve personally met people in government, right, ministers in Parliament, and what I’ve seen is they’ve been very positive about regulating. Some of them have been very vocal that a ban is not the solution because they understand technology … they understand that banning a technology is not a solution.

Another spokesperson from the Bangalore-based exchange CoinSwitch noted that the report does not mention any specific government body that’s responsible for such actions. They also added that the article did not contain any quotes from reliable sources.