There has been a lot of waiting and speculation since the Reserve Bank of India’s announcement that they would ban crypto trading last April. However with the 5th of July deadline already passed, it looks like the ban may not be put in place at all.
According to the RBI, once the ban came into effect, neither private nor institutional crypto investors would be allowed to invest money into, or take money out of digital assets. The ban was supposed to stop money laundering and other criminal activity involving cryptocurrencies.
The announcement was heavily challenged by crypto enthusiasts, who argued that investing in cryptocurrencies was no different than any other type of investing. Anirudh Rastogi from TRA Law said the ban was “unconstitutional at various levels … know-your-customer (KYC) and anti-money laundering (AML) verification should be enough to prevent illicit activity.”
RBI may rethink their decision
It now looks like RBI may be going back on their decision to enforce the crypto ban. A panel set up by the finance ministry seems to agree with Rastogi. An anonymous government official was quoted as saying
I don’t think anyone is really thinking of banning it (cryptocurrencies) altogether. The issue here is about regulating the trade and we need to know where the money is coming from. Allowing it as (a) commodity may let us better regulate trade and so that is being looked at”.
Former RBI deputy governor R. Gandhi gave his opinion about the ongoing debate surrounding the ban:
If these (cryptocurrencies) are used to settle transactions, then it acquires the nature of currency. So that is one thing that one needs to be wary of. But if people want to invest in a commodity then that is different, because then we can assume that they are aware of the risks involved.
Shubham Yadav, co-founder of Coindelta said exchanges are willing to help the government to develop more robust systems to combat criminal activity involving cryptocurrencies, saying “We can help them in designing a monitoring system for blockchain where it can remotely monitor all transactions.”
Indian crypto exchanges already have some of the world’s strictest KYC and AML guidelines.