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India Crypto Ban: How Far The Govt’ Will Go?

India Crypto Ban: How Far The Govt’ Will Go?

India’s unclear stance towards the cryptocurrency since last year, has always been a big concern to the crypto community in the country. In India, the cryptocurrency payments are becoming more and more popular among the citizen, however, currently the government is planning to outline the regulations for operations related to the cryptocurrency.

The set series of the cryptocurrencies banning in India started since 2018, where the government commanded all India banks to stop meddling with the digital asset, especially Bitcoin. Eventually, the rock path faced by the industry players seems to stop as the leading crypto exchange, Binance has acquired WazirX, the fastest developing crypto exchange in India.

As the acquisition poses a good sign for the gray era of cryptocurrency in India, however, what says the government? How far will the government go to continue its mission in putting an end on the cryptocurrency?

Let’s dig in more!

India Government’s Involvement in Crypto

In April 2018, India’s Central Bank, Reserve Bank of India (RBI) issued a notice to the country’s banks to stop having business or dealing with the virtual currency entities and impediment the ties with existing companies in exactly three months’ time. The sudden summon burst the shutdown of many cryptocurrency exchanges in the country including Koinex and Zebpay, however, Wazir X managed to remain exist by alternating its operation to peer-to-peer (P2P) trading.

RBI claimed the cryptocurrency schlepped risks in various ways, not to mention it is allegedly a part of the Ponzi scheme which later might harm the investors. The abrupt resolution to bar cryptocurrency also eventually sparked alarm to the High Court of Delhi as it was deemed to be violating the constitution.

Delays on Crypto Bill

Since India’s RBI clampdown on crypto, the government started to draft Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019 which proposed a 10-year prison sentence for anyone who mines, generates, holds, sells, transfers, disposes of, issues or deals in cryptocurrencies.

The effort does not stop there, when the inter-ministerial committee (IMC) recommends banning all set private-cryptocurrency. The report by IMC was sent along with the draft bill and states that there are around 2,116 cryptocurrencies. The draft bill was expected to be introduced in the winter session (starts on November 18 and ends on December 13) of parliament. At the same time, since the bill has already been public, there are many crypto activist fights and campaign are going on.

Previously, a parliament session supposed to be held on October 16 which highlighted the prohibition on banks and financial institution from providing digital currency-related services but the court postponed the date to the next hearing on November 12. However, the date was further extended to November 19 due to holidays in India.    

WazirX-Binance: New Hope to India’s Crypto Community?

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Last month, Binance has acquired an Indian-based cryptocurrency exchange, WazirX. Binance’s entry to the India cryptocurrency market is surprising as the country sphere is greatly disrupted by the government’s ban on the digital currency. Despite all that, the acquisition seems to be new dawn to the positive cryptocurrency development in the country.

According to Founder and CEO of WazirX:

WazirX’s acquisition by Binance further shows the belief in the crypto ecosystem of India. The postponing of the bill is actually a good sign as it shows that the India government is not rushing into anything.

When India is persistent to ban cryptocurrency, WazirX believes that the government will follow the footsteps of other developed nations, by involving the crypto industry in decision-making and introduce positive regulations.

In case there’s a negative outcome, it will be a huge loss to the country as there would be a massive brain drain, and companies moving out to crypto-friendly countries resulting in huge loss of tax revenue and jobs. Not only that, all this will also result in lesser venture capital flow into India.

As per the explanation, Nischal believes, “I don’t think that our government would want that.”

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