As we all know by now, India is not too pleased with the prospects of bitcoin and cryptocurrency. The country is presently contemplating a new law that if passed, would ban all crypto activity and trading in the future.
India Is Not Crazy About Crypto
However, another part of the law has not yet been discussed, and that is the one that allows the government of India to examine the past transactions of all the country’s citizens. This is rather dangerous in the sense that people’s privacy is going to be invaded in ways it likely never has before.
Let us discuss a little history first. For the past three years, we have witnessed India have a very up and down relationship with the world of crypto. In 2018, things took a heavy turn when the country’s regulators set forth a law that prevented all crypto-based businesses from garnering access to standard financial tools and services. While the law did not necessarily ban crypto trading, it disallowed all companies delving in crypto from getting bank accounts and forming relationships with standard financial institutions.
As a result, many companies shut their doors and were forced to move out of the country to lesser hostile regions, though the animosity did not seem to last long given that two years later, in 2020, the country’s Supreme Court ruled that the present law, as written, was unconstitutional. Thus, the rule was repealed, and crypto businesses were back in the midst. People began trading like there was no tomorrow, and India seemed to be on the verge of becoming one of the world’s biggest crypto havens.
However, now India’s reputation is being soiled again given that this new law being proposed would outright ban all crypto trading and related activity. This is no longer a matter of banks and crypto firms not being able to work together. This law would not allow people to trade crypto in any way, shape or form, and even more dangerous is the fact that the law – while allowing people to get rid of their holdings within a certain period – would also permit government regulators to research all past transactions amongst residents.
The only cryptocurrencies that citizens of India would be allowed to delve in would be those issued by the Reserve Bank of India (RBI), and that is only if the institution were to ever do so in the future.
This New Law Seems Dangerous
Finance minster Nirmala Sitharaman had something to say about the new law. In a recent interview, he commented that it likely would not shut down all outlets for crypto lovers in the region. He states:
My view on this is that, of course, the Supreme Court has commented on cryptocurrency, and while the RBI may take a call on official cryptocurrency, from our side, we are very clear that we are not shutting off all options.