The Indian Cryptocurrency Ban Rumbles On

The Indian Cryptocurrency Ban Rumbles On

By Benson Toti - min read
Updated 21 March 2023

The future of the Indian cryptocurrency markets remains in the balance. Last year, the Reserve Bank of India (RBI) told the country’s banks to stop handling any cryptocurrency transactions. This blocked exchanges in the country from operating effectively. Peer to peer trading on coins like Bitcoin is still legal, but there are concerns that this might also be outlawed in the future.

Earlier this year, a Government panel in India recommended a ban on all digital currencies. Their report mentioned tokens that have been “created by non-sovereigns”. It went on to say that there is “no underlying intrinsic value” in this kind of money. Therefore, only state-created cryptocurrencies would be legal.

Will the Indian cryptocurrency ban stand?
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The Current Situation

At the time of writing this article, a hearing is going on in the Supreme Court of India. From there it should surface what the future holds for Indian cryptocurrency traders and investors. Crypto enthusiasts in the country are hoping for the industry to get the green light, while the Government position is that a full ban on all cryptocurrency activity is needed.

Reports from the court suggest RBI officials have been criticised for failing to answer questions correctly. This has led to the case being deferred for two weeks, in order for the RBI to come back with answers. It seems the wait to find out the court’s decision on the matter will continue.

Earlier reports suggested that the RBI may have over-stepped their powers by banning cryptocurrencies. It has also been revealed that the ban was implemented without any research or consultation being carried out.

Meanwhile, it has been reported that the Indian cryptocurrency market could be worth as much as $13 billion. This is the amount estimated by Sidharth Sogani, CEO of blockchain research company Crebaco Global Inc.

What Happens Next?

The latest news from court should appear in the next couple of weeks. Yet, it seems unlikely that the case will be solved at that point.

Will India eventually ban all crypto coins except for a digital version of the Rupee? This certainly seems to be the aim of the Government right now. There is speculation that they are working on an official cryptocurrency. No launch date has been hinted at for it to date, though.

Yet, it could prove to be extremely difficult to enforce a blanket ban on this massive country with a population of over 1.3 billion people. Instead, it is possible that the Indian cryptocurrency industry gets tightly regulated.

The emergence of a highly regulated Indian market could be a huge boost for cryptocurrencies. With potentially millions of new investors buying new tokens, it could lead to price increases on popular currencies.