Indian courts lifted the blanket ban on cryptocurrencies five months ago. However, an official stated that the government is considering a new law to ban cryptos again.
According to an Indian government official, the Reserve Bank of India and two ministries are actively working on a legal framework to ban cryptos on the subcontinent.
Furthermore, Indian news website Moneycontrol also wrote that authorities in India are making preparations to pass a law banning crypto trading. As the source claimed, consultations between the Ministry of Law and Justice, the Ministry of Electronics and Information Technology, and the Reserve Bank of India had begun about the framework of such a law.
The anonymous official added that, once Parliament resumes for the session, they will get the law ratified. Parliament will probably reconvene in late August or early September.
However, the government is considering banning crypto through legislative change, because it would be more binding. Earlier, the authorities used methods such as the blanket ban from the RBI for banks dealing with cryptocurrency companies. But this new method will define the illegality of the trade more clearly.
Cryptocurrency lows in India
In March, the Supreme Court of India voided a blanket ban on banks dealing with crypto businesses. The RBI had imposed the prohibition since July 2018. However, the repeal caused a boom in new exchanges across the country.
Despite that, government officials have been contemplating the idea of enacting a new law not allowing cryptos in India in place of the RBI ban.
Ashish Singhal, the CEO of Indian crypto exchange CoinSwitch, stated that the chances that the authorities would impose a new blanket ban on digital currencies were more probable in 2019 than this year. According to him, there has been a change in how crypto is perceived across India, hopefully for the better.
Many parts of India still face some restrictions on movement. This is due to the coronavirus pandemic, as a lockdown was ordered in March. Meanwhile, crypto exchanges in the country reported strong growth as some traders moved away from traditional assets.