The Indian government this week announced that it is considering banning the use of ‘private cryptocurrencies’ in the country. The announcement follows a meeting of top Indian government officials and financial regulators on Tuesday (Oct 30).
Officials at the meeting were briefed on the deliberations of a high-level committee tasked with devising “an appropriate legal framework to ban use of private cryptocurrencies in India and encouraging the use of Distributed Ledger Technology”, according to a Ministry of Finance press release.
Chaired by Minister of Finance and Corporate Affairs Shri Arun Jaitley, the 19th meeting of the Financial Stability and Development Council (FSDC) discussed, among other topics, “the issues and challenges” presented by cryptoassets and cryptocurrencies.
The announcement has compounded the ongoing crisis of the Indian cryptocurrency industry following an order by the Reserve Bank of India (RBI) in April this year that restricted domestic banks’ ability to provide services to crypto firms and exchanges.
Legal petitions by several crypto exchanges seeking to reverse the RBI ban are currently being heard in the Supreme Court, which on October 26 requested the government to provide its opinion on cryptocurrencies within a fortnight.
The Indian government’s approach echoes China’s “anti-cryptocurrency, pro-blockchain” stance on crypto regulation and has fuelled speculation that it is moving closer to launching a central bank digital currency, as has previously been proposed.