By India has been Scrupulous about Cryptocurrencies since 2018. Even after an eternity of setting up discreet committees that were instated to study the various use cases of cryptocurrencies and regulate the possession of crypto assets the government still wants to ban all cryptocurrencies and crypto-assets in India. India is very close to a blanket ban on cryptocurrencies.
Just a few weeks earlier, an Indian blockchain advocate named Varun Sethi, leaked a draft bill which was supposed to ban all cryptocurrencies in India. Soon after this event, the Indian government took no time in making the Bill public. The Inter-Ministerial Committee (IMC) led by Subhash Chandra Garg, a former secretary at the Department of Economic Affairs, Ministry of Finance, released the report which meant doom for cryptocurrencies in India.
India will take a big hit
Talking about the current state of cryptocurrencies in India, Timothy Draper, Venture capitalist and founding partner of Draper Fisher Jurvetson (DFJ), Draper Associates, and the founder of Draper Venture Network and Draper University said in an interview with media outlet Inc42:
“It is akin to the Luddites. They are in fact saying, ‘we will not tolerate progress.’ It will set them back 40 years. Imagine if they did this with the internet?”
The recent IMC report has also proposed the rumored 10-year jail term of 10 years for those who mine, hold and transact in cryptocurrencies in any form besides the ban and a fine of INR 50 Cr for defaulters. However ridiculous this may sound, this is a reality in India and is by far the most illiberal move a nation has made against cryptocurrencies.
According to the 18-page draft bill, India defines a cryptocurrency as any information, code, and number or token that is not part of any official digital currency is generated through cryptographic means and intended to provide a digital representation of value. This also hinted of a digital rupee that might be developed if private coins are banned. The report clearly states:
“No person shall mine, generate, hold, buy or sell or deal in, issue, transfer, dispose of or use cryptocurrency in the territory of India.”
Is this the end of Privacy coins in India?
The bill, however, is targeted only at cryptocurrencies and not the technology behind it. The report mentions that using the distributed ledger technology (DLT) and Blockchain technology for research and educational purposes are not illegal. Draper, however, thinks that this move could mean a huge setback.
“People will want to leave India to get to a country that is less backward. I suspect they will get out so they can live a better life.” Draper added.
Whether the said bill will be modified or implemented right away is yet to be seen. Many of the crypto enthusiasts are of the notion that implementing this bill is a violation of one’s fundamental right of trading, and can be challenged in court.
The friendly and the foes
Many crypto businesses and enthusiasts have questioned this decision, while those who are fighting to ban it are on the same page with the regulatory committee. NS Nappinai a Supreme Court and Bombay High Court lawyer commented,
“The right to pursue any profession, trade or business is subject to the reasonable restrictions provided in Article 19 (6).”
She believes that if cryptocurrencies were treated as a commodity it could have been regulated and traded as well. This ban is however completely ridiculous. She further states that:
“The Government has spent a couple of years evaluating its position qua cryptocurrencies. Yet the report does not demonstrate the extensive inputs, discussions, issues or concerns voiced by various quarters.”
Nischal Shetty, the CEO and founder WazirX, stated that:
“Report says the government will take all measures to usher in digital economy using Blockchain. By banning Crypto there can never be a public blockchain so the report contradicts itself.”
Supreme Court lawyers Vijay Pal Dalmia and Sidharth Dalmia were the first who filed a PIL (Writ Petition (Civil) no. 406 of 2017) in July 2017, seeking a complete ban on cryptocurrencies due to the rising illegal activities around it.
Talking about the IMC Recommendations, Vijay Pal Dalmia told media outlet Inc42:
“It’s a step in the right direction. This will finally end the economic anarchy that cryptocurrencies in India had created. With such stringent actions which include up to 10 years of jail as punishment and up to INR 25 Cr of penalty, the government will be able to contain illegal tradings.”
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