Although the Indian courts lifted its long-standing crypto ban five months ago, a reliable source has revealed that another ban may soon be announced.
A top government official said that two ministries are working with the central bank of India to see that crypto activities do not stand in the country.
Moneycontrol news website in the country reported yesterday (August 4) that soon, people in India may not be able to trade cryptocurrencies. The news site stated categorically that an official told it that the Ministry of Law and Justice, the Ministry of Electronics and Information Technology, and the central bank are creating a new law to effect the ban.
The official said what’s delaying the law is that the parliament is yet to start for the new session. The new session will begin in few weeks according to him.
According to the official, this ban will be more effective than the first because it now involves the legislative arm of the government. The previous ban wasn’t too strong since it was issued by the central bank for other banks to comply with. This time, every person in India will understand that it is illegal to trade cryptocurrencies.
A law enforced by the Reserve Bank of India on other banks prohibiting them from attending to crypto businesses was lifted in March after 20 months of being effective. After the ban was lifted, many crypto exchanges arose in the country.
But the joy experienced by India’s crypto community may soon come to an end as there are reports that another law to ban crypto activities is coming soon.
When CoinSwitch’s CEO, Ashish Singhal, was asked to comment on the matter, he expressed hope that nothing like that would happen because the government has shown more concern for cryptocurrencies this year than in 2019.
Lockdown effects minimized by crypto
While the lockdown was imposed on the people in March, there was a sharp rise in the interest of residents on cryptocurrencies. Many of them used their fiat to buy some crypto. The same result is still being witnessed because the lockdown hasn’t been completely phased out.
Following the removal of RBI’s ban, CoinDCX crypto exchange in India recorded a 900% increase in the number of people registering with them just one week later. This led to a surge in the company’s growth such that it ended its first quarter with a profit of 47%. WazirX trading platform also made 80% month-on-month profit in March and April. The removal of the ban also encouraged Coinbase to enter the Indian market and offered crypto services including trading and conversion of cryptocurrencies from one form to another.
According to Moneycontrol, the Indian market is a big one for cryptocurrency companies and they are enjoying it more because of the lockdown:
“A growing number of investors have found refuge in virtual currencies as traditional assets have taken a beating over worries about the health of the economy battered by the coronavirus outbreak.”