India is likely to ban private crypto currency

Indian government likes to be in the news around the crypto currencies. This time India plans to introduce a law to ban private cryptocurrencies such as bitcoin in the country and provide a framework for the creation of an official digital currency.

The legislation seeks to “prohibit all private cryptocurrencies in India,” but allow “for certain exceptions to promote the underlying technology blockchain of cryptocurrency and its uses.” The Reserve Bank of India never liked the crypto currencies and have already asked its banking members to refrain dealing with the companies rendering services to crypto currencies.
However, last year the supreme court of India

The law also seeks to “create a facilitative framework for creation of the official digital currency” that will be issued by the nation’s central bank, Reserve Bank of India, the agenda said.

In 2018, an Indian government panel recommended banning all private cryptocurrencies and proposed up to 10 years of jail time for offenders. The panel also suggested the government to explore a digital version of the fiat currency and ways to implement it. This decision was however reversed by the Supreme court of India in the year 2020 and allowed the investments in crypto.

The move was necessary to curb “ring-fencing” of the country’s financial system.
It had also argued that Bitcoin and other cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by the government.
The 2018 notice from the central bank sent a panic to several local startups and companies offering services to trade in cryptocurrency. Nearly all of them have either since closed shop, or pivoted to serve other markets.