India seems to be inching closer to an all-out crypto ban.
On Tuesday, October 30, the 19th meeting of the Financial Stability and Development Council (FSDC) was held in India. Attendees included India’s finance minister, the head of the securities board, and the governor of the Reserve Bank of India (RBI). During this meeting, attendees discussed a possible ban on the private use of cryptocurrency, according to an official October 30 press release.
The RBI, the country’s central bank, has taken a negative stance against the use of digital currency within the country as far back as 2013.
On December 24 , 2013, the RBI published a letter on its website cautioning the citizens of India against the use of cryptocurrencies. In this letter, the RBI pointed out that no central bank had authorized cryptocurrencies as a medium of payment, and the public should avoid using digital currency given the risk of financial loss. It cited volatility in price, concerns over the legality of trading in digital currency, and the potential for it to be used for illegal activities.
In April of this year, the RBI solidified its stance against cryptocurrency when Chief General Manager Jose J. Kattoor issued a statement that effectively banned financial service providers regulated by the RBI from providing any financial services to cryptocurrency-linked businesses or individuals.
Although the ban stopped banks and other financial service providers regulated by the RBI from participating in the cryptosphere, it did not ban citizens from mining, owning, or using digital currency, and it did not prohibit store owners from accepting crypto as a form of payment.
But on Tuesday, the FSDC “deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private cryptocurrencies in India and encouraging the use of Distributed Ledger Technology.”
The wording of the announcement strongly suggests Indian officials are considering prohibiting Indian citizens from exchanging crypto for fiat or other digital coins and stopping store owners from accepting digital currency in exchange for their wares. However, it does not mention prohibiting the public from mining, purchasing, or simply owning digital currency.
This announcement could be a sign that the Indian government is ready to take control over the regulation of cryptocurrency in India. Just last week, India’s Supreme Court gave the government two weeks to come up with an official stance regarding cryptocurrency.
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