An Indian government panel that was commissioned in November 2018 to draft laws and guidelines for cryptocurrencies has submitted its final report to the government.
According to an anonymous source speaking to CNBC TV18: “The panel has categorically said that all such currencies should be treated as illegal… The law should enlist punitive measures that the government and its investigative agencies can take in case it finds anyone or any entity trading or dealing/holding it”.
This information is generating rumors that India is about to make Bitcoin and cryptocurrency completely illegal, although the official content of the report has not been disclosed yet.
This all started when the Reserve Bank of India (RBI) initiated a legal struggle in the crypto space which was quickly escalated to the Supreme Court. RBI mandated that after 5 July 2018 no one could use bank accounts to facilitate the buying or selling of cryptocurrency. This crippled some cryptocurrency exchanges but the effect was only temporary as peer-to-peer trading accelerated. India quickly became a hub for peer-to-peer cryptocurrency trading, also known as Bitcoin dealing. Major exchanges like Huobi soon launched platforms to makes it easier for Indians to trade cryptocurrency this way.
The end result was a cryptocurrency market that was healthier and more lucrative than ever across India as this form of trading became an easy and legal business. This was not the intent of the RBI ban since it made the cryptocurrency market far less controllable.
Analysts believe the government panel may be trying to correct this situation by making cryptocurrency outright illegal, so law enforcement can begin to crack down on Bitcoin dealers. Now that dealers have had months to get established, fighting a war to eliminate them would be intractable. A total ban on cryptocurrency would ironically make Bitcoin dealing even more lucrative.
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