Indian government officials are reportedly planning to discuss a new bill whose legal framework would ban cryptocurrencies on the subcontinent.
According to a Sept. 15 report from Bloomberg, the Indian federal cabinet is considering a law banning crypto six months after courts lifted a blanket ban. Anonymous sources claimed that the Indian government would encourage the development of blockchain technology, but not cryptocurrency trading.
In response, Ripple CEO Brad Garlinghouse called the decision “disappointing,” stating that cryptocurrency had the potential to help underserved populations in the country:
Disappointing to see India flip flop on crypto, hamstringing a nascent industry which could serve one of the biggest populations of unbanked/underbanked citizens. https://t.co/ffMUIQOnA7
— Brad Garlinghouse (@bgarlinghouse) September 16, 2020
As of May, India had roughly 190 million unbanked adults — those without access to a bank account or other financial instruments. Some experts have claimed that crypto assets like Bitcoin (BTC) are a way to encourage financial literacy with simple tools for investing and saving.
Before the Reserve Bank of India, or RBI, imposed a blanket ban on banks dealing with crypto businesses in 2018, the country’s crypto market was worth $12.9 billion. The Supreme Court struck down the RBI policy in March, leading to a boom in new exchanges across the subcontinent. A May report from crypto exchanges OKEx and Coinpaprika stated the former had a 545.56% increase in site traffic from India in Q1 following the ban reversal, and the number of new users also increased 4,100%.
However, there have been reports since June of Indian government officials considering a new law which could ban cryptocurrencies. Unlike RBI’s approach of essentially blacklisting banks, the government may now be considering banning crypto through legislative change, which would reportedly be more binding.
India’s Parliament reconvened on Monday after being delayed due to the pandemic. However, Tanvi Ratna, CEO of blockchain advisory firm Policy 4.0, stated that as of Sept. 13, no crypto ban legislation appeared in the list of bills to address while the government body is in session for 18 days.
Ashish Singhal, founder and CEO of Indian cryptocurrency exchange CoinSwitch, said in June that a blanket ban on digital currencies was more likely last year than it is in 2020. He said there has been a change in the way crypto is perceived across India, hopefully for the better.