Topic: Guide on crypto ban/prohibition in India so far - Only facts and press releases (Read 260 times)

Post is updated with latest news on budget and parliamentary session updates.

This post is now updated with the latest news RBI's notification issued on May 31, 2021. The notification revolves around bank/regulated entities quoting the RBI circular issued in 2018 even though the Supreme Court had set aside the circular in March 2020.

You are on the Bitcoin forum and it is still not illegal here to "say" crazy things. An idea that apologists and sympathizers of our present Govt, find hard to wrap their heads around. Still, here's my apology for making it about religion:

https://bitcointalksearch.org/topic/--5282576

You had to make it a religious issue, didn't you? Don't you feel sometimes that you should reflect on your own thoughts once? I never brought up religion and I was quite respectful of your thoughts. Also, think along these lines, such Hinduphobic thoughts in your message are the ones that kind of instigate Hindus to support the ruling party. Maybe if you empathized and stopped targeting Hindus for just being Hindus and/or having a different view, they would be open to parties other than the ruling party. But everyone seems to be targeting Hindus and are equating Hindus with the ruling party, including you my dear friend. Let's be tolerant of all religions.

Thank you for this. But to be honest, that board is totally crazy one! They are talking about putting some group of politicians to death, finishing off an entire country, etc. You're absolutely right in calling it waste of time and breath. I have decided not to visit that board again!

You sound like one of those hopefuls who have been sleeping through these last years of attacks on freedom of expression as well as the blatant plays along the fault-lines of our society. Probably the typical class privilege of middle class India. They choose to ignore what happens with the polity as long as it doesn't touch them.

I love the "optimism" you guys have though. Of course you don't have to agree with my opinions on why this Govt is a blot on the country's inclusive history. Most people who can appreciate this sentiment are generally considered as left intellectuals in today's society. Well, i guess there will always be the types who buy into "resurgent Hindu culture" bullshit.

Good point. Its just that some of us tend to get carried away when we come across people who have been bitten by the positivity syndrome despite the floating dead bodies, unemployment and a tanking economy. Well, who cares as long as the Hindu is surakshit...LOL..

We do have a thread for politics if you too get "carried away" and you can post there if you want to waste time and breath. The main forum has its own Politics thread but the India sub doesn't have one due to the lack of a moderator. Anyways, here's the link. You're welcome.

Yes, the raiding part was idotic. But the regulations were something issues in Feb and my focus was more on holding social media accountable.

Actually, I am an advocate of regulating bitcoin/crypto without banning it. And I am pretty vocal on this forum about why government cannot ban crypto. You can read it here: https://bitcointalksearch.org/topic/challenging-a-ban-on-crypto-through-writpil-5334398. At the same time I advocate that social media platforms need to be held accountable if they are playing jury. Like you said, they are no angels.

This sounds more like a personal issue that you have with the government. Because this sounds like ridiculous accusation.

No, this isn't confirmation bias. If there were posts on Twitter Vs Government, twitter would most likely boost posts that are in favor of them. It is their algorithm and they can do anything. In order to remove my "confirmation bias", I was testing out on twitter on some hashtags. I was repeatedly getting a hashtag "IsraelAparthiedState" even after repeatedly telling I dont want to see such posts in my search tab whereas all the other hashtags were refreshing. (I personally don't like seeing the violence, since it keeps me disturbed for the rest of the day).

Wow, more personal opinions. You really hate some people with all your heart, don't you? 

Finally something we both agree to

We can keep arguing. And you can get back with more comments and opinions. But debating in this forum is least useful for either of us or the country. This post is most focused on real facts and news on crypto ban so far. So let us keep it that way. You are entitled to your opinion and I am entitled to mine. But let's avoid these arguments in this forum; let's keep that in suitable forums like facebook or twitter, if you must. Cheers and peace out

Much of the outcry has been on the idiotic move to "raid" Twitter offices after the "manipulated media" tag was pasted on to Sambit Patra's posts. Not really on any sort of regulation.

By the way, you cannot, in good faith, be a supporter of bitcoin on the one hand and not take offense at the slew of non-democratic and high-handed actions that this present Government has been taking since coming to power. They have truly shaken the foundations of a democracy which survived much of the factional splits that other countries in Africa/ Eastern Europe suffered post-WWII.

Why do you think would they "boost" posts that criticize the government? That is just your own confirmation bias. Nobody likes bigots. Much of the intellectual world puts its energies into finding solutions to the problems that arise out of our differences. It is only natural that they find natural allies in people who run some of the most advanced organizations of the world today.

Frankly, thank god for capitalism. Had it been up to the people who like to tow government line and just be majoritarian pricks, the whole world would have been worse off.

Agree that FB and other social media giants are no 100% angels. The same can easily be said for the government.

Thank you for your kind words. Yes, I plan to keep the same thread updated with any latest developments, so that this stays relevant source of ready reference material for all



Further, regarding the banning of Facebook and Twitter, I feel the news is being rather sensationalized by media outlets and social media that Government is banning them for recent tweets/posts and silencing voice of people. However, the truth is that the regulations only change the status of Facebook and Twitter from being intermediaries i.e. they can be held responsible for the posts of the users and cannot take the shelter that they just let users post. There is no ban in the directives.

Keeping this aside, Facebook, Twitter and Instagram obviously would boost posts that criticize government and play a narrative where these social media platforms are the victims. However, important thing to note here, is that Facebook and Twitter have not acted upon the directives that were issued in February, in spite of having plenty of time and huge amount of resources at their disposal. Had they followed the rules and not openly flouted these directives, they wouldn't have had to face this situation (unless they believe they are above the government and the law).

On a separate note, one of the main reasons for the directives was to ensure Facebook and Twitter are not able to manipulate people because of the reach that they have. If you think that Facebook and Twitter care about you, then you are totally wrong. We users are just Guinea pigs for them. Don't believe me? Read this news: https://www.theguardian.com/technology/2014/jun/29/facebook-users-emotions-news-feeds
and do watch this video: https://www.youtube.com/watch?v=32bSuaDgqg0

Similarly, if government works towards regulating crypto transactions in India rather than outright ban, I would consider it a win-win situation for everyone concerned. Smartly designed regulation is very important in crypto industry to avoid criminal activity or tax evasion when we see from a country's perspective.

Goid collection of press releases. I suggest you to keep the same thread updated with correct timelines in case any significant update is received from MoS or any other reliable sources. So that this thread works as a ready reference for all concerned about this matter.

It seems Indian government is not a banning spree. They are now even considering banning facebook and Twitter if the government directive of appointing a compliance officer. So I personally don't see any hope for cryptocurrency in India.

Nice article !

Thank,
Will be very Helpfull.

Hi everyone,

We all have been reading a lot of news on crypto ban in India recently and some of us have observed a lot of fear mongering in these articles. Therefore, I am writing this article with all the facts backed with press releases by government official website (pib.gov.in, dea.gov.in, etc.), Supreme court orders and the RBI notifications from RBI's official website (rbi.org.in). I am completely focusing on the facts and trying to refrain from expressing my personal opinion in this article. I trust you will find this article useful from a factual perspective.

2013 to 2017
RBI issues 3 notification in December 2013, February 2017 and December 05, 2017 cautioning Indians from using crypto/virtual currencies due to the potential financial, operational, legal, customer protection and security related risks associated with these. These are merely cautions and does not call for any ban. Further the Ministry of Finance also makes a press release stating that virtual/crypto currencies are like Ponzi schemes which can be used to cheat people and also used for various illegal activities.
You can read these RBI Official Press releases in https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30247 , https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=39435 and https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=42462 and the Press release by Ministry of Finance on https://pib.gov.in/PressReleasePage.aspx?PRID=1514568

November 2017
The Government constitutes an Inter-Ministerial Committee (IMC) on 2.11.2017 under the Chairmanship of Secy (Economic Affairs), with Secy (Ministry of Electronics and Information Technology), Chairman (Securities and Exchange Board of India) and Dy. Governor, Reserve Bank of India as Members, to study the issues related to virtual currencies and propose specific action to be taken in this matter. I was not able to find any press release in 2017 on this, but this was later revealed in press release by government in July 2019, provided below (https://pib.gov.in/Pressreleaseshare.aspx?PRID=1579759).

April 2018
RBI issues the notification no. RBI/2017-18/154 wherein entities that are registered with RBI, such as Banks, Forex traders, etc. are not permitted to deal with any person/ company/ firm dealing in crypto/virtual currencies. By virtue of this notification, all activities of the RBI registered entities in respect of crypto currencies is prohibited, thereby the entire ecosystem for crypto currencies such as banking channels were cut off. However, this notification in itself did not ban cryptocurrencies.
You can read the notification no. RBI/2017-18/154 (DBR.No.BP.BC.104 /08.13.102/2017-18) in this link: https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11243

February 2019 to July 2019
In July 2017, the Ministry of Finance makes a press release that the Inter-Ministerial committee has submitted its report on Virtual currencies along with the draft bill titled 'Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019' in February 2019 and the same was placed on the website of Department of Economic Affairs. The report contains the following:

• the positive aspect of distributed-ledger technology (DLT) and suggested various applications, especially in financial services, for use of DLT in India for processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market.
• given the risks associated with private cryptocurrencies and volatility in their prices, the Group has recommended banning of the cryptocurrencies in India and imposing fines and penalties for carrying on of any activities connected with cryptocurrencies in India.
• recommends exploring into official Central Bank Digital Currencies ('CBDC')
• recommends Government may establish a Standing Committee to revisit the issues addressed in the Report

 
Further, the draft bill contains the legal regulations for extensive ban of cryptocurrencies and punishment for each contravention. Further, it lays down a foundation for implementation of official Central Bank Digital Currencies ('CBDC')
You view the press release in https://pib.gov.in/Pressreleaseshare.aspx?PRID=1579759 and view the report and draft bill on https://dea.gov.in/sites/default/files/Approved%20and%20Signed%20Report%20and%20Bill%20of%20IMC%20on%20VCs%2028%20Feb%202019.pdf
Further during this time a Rajya Sabha member also raised a query whether cryptocurrency was banned in India and several other questions. In response Anurag Thakur, Minister of State for Finance, replied that it was not banned and that government had received the Inter-Ministerial Committee's report. This can be read here: https://pqars.nic.in/annex/249/Au2591.pdf

February 2020
RBI issues a bulletin wherein it acknowledges that Distributed ledger system can be used in various industries and financial institution. Further, the bulletin also talks about Central Bank Digital Currencies ('CBDC') being implemented by various countries.  
You can read this article on https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=18766

March 2020
In response to the Writ petition filed by Internet and Mobile Association of India (which included a lot of petitioners) the Supreme Court of India ruled that RBI could not restrict regulated entities from dealing with companies engaged in dealing with cryptocurrencies. It states that when the consistent stand of RBI is that they have not banned virtual/crypto currencies and when the Government of India was unable to take a call to ban the same, RBI could not restrict its regulated entities either.
You can read the full judgement in this link: https://main.sci.gov.in/supremecourt/2018/19230/19230_2018_4_1501_21151_Judgement_04-Mar-2020.pdf

January 2021
In the Lok Sabha Bulletin released on January 29, 2021 lists the Cryptocurrency bill under the new bills to be introduced in the Lok Sabha. You can find the same in the this link: http://loksabhadocs.nic.in/bull2mk/2021/29012021.pdf (Go to Page no. 26 and Item no. 12 under the New bills Section). This bill is titled "The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021" with the description "To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses." However, the text of the bill is yet to be presented.

February 2021
In a Q&A session in the Rajya Sabha questions are raised on the ban of cryptocurrency and how government plans to implement it, in spite of Supreme Court quashing RBI's restrictions. The Finance ministry responded that the Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system. However, The Government will explore use of block chain technology proactively for ushering in digital economy. Further, response quoted that the Government would take a decision on the recommendations of the IMC regarding banning of cryptocurrencies and the draft bill after consideration would be introduced in the Parliament.
You can read the Rajya Sabha Q&A here: https://pqars.nic.in/annex/253/AS79.pdf

March & April 2021 - Only presented in News
Anurag Thakur, Minister of State for Finance, says that government welcomes blockchain as an emerging technology and that new ideas must be evaluated, explored and encouraged with an open mind at an event arranged by Entrepreneurs' Organization.
Read more at: https://economictimes.indiatimes.com/news/economy/policy/government-open-to-evaluate-explore-cryptocurrencies-says-anurag-thakur/articleshow/81367065.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Further he said the Government of India is open to adopt state digital currency and they want to promote digital adoption across sectors under the Digital India Initiative. He also mentioned Reserve Bank of India is working towards India to have its own digital currency.
Read more at: https://bfsi.economictimes.indiatimes.com/news/fintech/approaching-the-cryptocurrency-regulation-with-an-open-outlook-investor-protection-anurag-thakur/82027897

May 2021
RBI issues a notification on May 31, 2021 wherein it states that it has found certain banks quoting the circular issued by RBI in 2018 to caution customers from using crypto/virtual currencies. In this regard, RBI states that such circular was set aside by the Supreme Court's order in March 2020 and the circular is no longer valid. However, it continues to state that banks/regulated entities can carry out customer due diligence processes as per KYC, anti-money laundering laws, laws against terrorism financing and foreign exchange regulations for overseas remittances.
Read more at: https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=12103

February 2022
The Finance Minister in the budget released on February 1, 2022 announced that gains from sale of Virtual Digital Assets which includes cryptocurrencies and NFTs would be taxed at 30% and only the cost of acquisition would be considered as a deduction. Also the Government directed the central bank i.e. RBI to start working on Central Bank Digital Currency ('CBDC') by FY 2022-23.
Further, during a parliamentary session, the Finance Minister mentioned that the government is yet to take a decision on regulating of cryptocurrencies or that of banning these altogether.
Read more at: https://www.indiabudget.gov.in/ and https://www.indiatoday.in/business/story/cryptocurrencies-to-be-banned-india-fm-nirmala-sitharaman-replies-1911713-2022-02-11

I hope this collection of press releases, notifications and bulletin is useful. Would be happy to have your thoughts and corrections, if any.

Last updated on: April 16, 2022 at UTC 8 PM