Is India Banning Cryptocurrency Heres What You Should Know

Coin World News Report:
Some regulatory agencies believe that “private cryptocurrencies” should be banned
CBDC continues to receive support from Indian institutions
India
For years, it has had a complex relationship with cryptocurrencies. Recently, this relationship has become the focus of attention after local media reported that major regulatory agencies and institutions in the country supported the ban on “private cryptocurrencies” such as Bitcoin and Ethereum. According to the Hindustan Times, these regulatory agencies believe that any advantages offered by the aforementioned “private cryptocurrencies” can be leveraged through the use of CBDC.
It is worth noting that the aforementioned report does not mention officials or institutions holding this view. Therefore, it is difficult to determine how strongly the government itself feels about this proposal.
Currently, the Indian government is preparing a discussion paper on the subject of cryptocurrencies, which may precede legislation. Despite several rounds of consultations hosted by the government in recent months, the current consensus is that the risks associated with using cryptocurrencies outweigh their benefits.
In fact, an official claims, “CBDC can do everything that cryptocurrencies can do. In fact, CBDC has more advantages minus the risks associated with private cryptocurrencies.”
However, given the increasing popularity of this asset class in the country, the Indian government may eventually choose to support assets such as Bitcoin and Ethereum. Furthermore, regardless of its stance on cryptocurrencies, India has always been positive about blockchain technology and its broader applications.
Lack of “institutional confidence”
The reversal of the aforementioned consensus will depend on institutional confidence in the asset class. For example, the Governor of the Reserve Bank of India has long expressed concerns about cryptocurrencies and their volatility. Like many others working with the government, Shaktikanta Das often speaks highly of CBDC while also emphasizing the potential risks associated with cryptocurrencies.
Indian Finance Minister Nirmala Sitharaman holds similar views.
In 2023, India adopted a comprehensive report by the International Monetary Fund-Financial Stability Board that recommended not to completely ban cryptocurrencies. However, the document also allows for stricter regulation of this asset class. Currently, India seems to lean towards this idea.
Crypto entities are also feeling the heat!
It’s not just cryptocurrencies, but crypto entities have also been on the wrong side of the Indian government.
Consider the case of Binance, for example. As early as January 2024, India blocked access to cryptocurrency exchange applications and platforms citing non-compliance with anti-money laundering laws. However, in August, the situation took a turn and Binance received support by being registered as a reporting entity with the Financial Intelligence Unit (FIU) of India.