Indian Government Set to Ban Cryptocurrencies With New Bill

The Indian government has recently started an inter-ministerial consultation as regards a draft bill designed to legalise the banning of cryptocurrencies in the country.

New Bill Will Ban Cryptocurrencies For Good

The draft bill titled “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ has been sent to all concerned government parastatals.

Sources close to the news has revealed that several government departments including the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA) have shown their support for the idea of a complete ban on the “sale, purchase and issuance of all types of cryptocurrency”
With the next election coming up in May 2019, the new draft bill is expected to get propose to the incoming government.

Several committees such as representatives of the DEA, CBDT, CBIC and the IEPFA have registered views denoting that already there is a lot of delay in taking action against cryptocurrency.

In a meeting recently held by this committee, it was concluded that “there is an urgent need to ban sale purchase and issuance of cryptocurrency”
Furthermore, the committee also observed that “since cryptocurrency could be used for money laundering, a ban could also be achieved under the Prevention of Money Laundering Act (PMLA).”

In its feedback to the department of economic affairs, the ministry of corporate affairs pointed out that the sale purchase and issuance of cryptocurrencies are carried out by individuals and companies on false inducements of massive returns.

As such it was concluded that such schemes are neither transparent nor do they fall within any regulated legal framework. The ministry also stressed that the majority of these schemes are fraudulent and targeted at “defrauding gullible investors”.

The Prevention of Money laundering Act

Since the bill is likely to take sometime before fully becoming a law, the ministry made a recommendation that anyone caught using cryptocurrencies to defraud investors and launder money should be prosecuted under the Prevention of Money laundering Act.