The Indian government may be considering a blanket ban on the use of bitcoin and other cryptocurrencies.
On Oct. 30, at a meeting of the financial stability and development council (FSDC), headed by finance minister Arun Jaitley, the issue of virtual currencies came up.
According to a release by the Indian Government’s Ministry of Finance through the Press Information Bureau, the working group “deliberated on the issues and challenges” of cryptocurrencies in the country.
The finance minister reviewed the current global and domestic economic situation and financial sector performance and the council decided that regulators and government would keep a close watch on the developments.
The Council debated on the challenges surrounding cryptocurrencies. Chaired by Garg who is the Secretary of Department of Economic Affairs, it appears there is a proposal to ban the use of cryptocurrencies and encourage the use of distributed ledger technology as was mentioned in the Union Budget Speech of 2018-19.
The council plans to devise an appropriate legal framework to ban the use of private cryptocurrencies in India. The word “use” in the statement may imply that buying, selling, transacting, or its conversion into rupees may be banned but not possession itself.
What exactly are private coins? Does the Council mean that they may restrict trading of privacy-oriented coins such as Monero or ZCash?
Nischal Shetty, founder of WazirX put forward a few theories. He said, “it’s very hard to say because I’ve never heard the term “private crypto” anywhere else before. They could be talking about: Non-government backed crytpo – which is every crypto today, Privacy coins may be which make it hard to trace? Which means a few coins may not be allowed and other will be, Crypto that is under the control of companies and not decentralized in which case BTC, ETH and many others that are open source and not owned by any private org.