India Unlikely to Ban Cryptocurrencies

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Every month you hear about a new proposed ban on cryptocurrencies. This time India is in focus on a rumor that bans may be coming soon. There was nothing to confirm a ban was in the works but it was widely reported as imminent anyway. This put pressure on the cryptocurrency market as any mention of a ban anywhere will send the Bitcoin (BTC) price into a downward spiral. Even though India currently represents about 2% of the entire market capitalization, the news was enough to start some panic selling. Now reports are coming out claiming that India will not implement a cryptocurrency ban but instead classify them as commodities, following suit with the U.S. and other countries, thus sparing them from an outright ban.

India Stops Short of Crypto Ban

Following months of speculation on what the Ministry of Finances ruling may be, we may have an answer. A senior official in the cryptocurrency review panel, set up by the ministry, had this to say, "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." He followed that by saying, "Trade is not a criminal offense. Most of us trade in various asset classes in the stock market. So how is this any different? What has to be in place is a mechanism to be sure that the money used is not illegal money, and to track its source is the most important thing." 

Some Investors still remain suspect of the initiative which is closely tied to the Reserve Bank of India which has not been secretive of its distrust in cryptocurrencies. In 2013, the bank released numerous statements calling Bitcoin (BTC) a Ponzi scheme and a bubble. Earlier this year they mandated all Indian banks cease services to crypto exchanges. This latest development could be an indication being that the RBI is shifting it's stance and tone if the government legitimizes cryptocurrency trading with a designation as commodities. Seemingly the main drive behind the proposed regulations is to crack down on scams, market fraud, and money laundering schemes. Reports indicate the regulations from India's Ministry of Finance should be ready by the end of July and set to go in to effect by December 2018.


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