Indian Minister Clarifies There is No Official Ban on Cryptocurrencies Yet

A government official of India has said there is no law specific to cryptocurrencies that prohibits their use in India, local news outlet Inc42 reported on July 19.

The statement was made by India’s Minister of State for Finance, Anurag Thakur, during an exchange with a Member of Parliament. Inside the Council of States, the upper house of Parliament of India, Thakur was asked if cryptocurrencies were actually illegal by MP Dharmapuri Srinivas:

“Whether the government has taken note about the prevalence of cryptocurrency in the country and if any action is being taken against the persons who are responsible for running the cryptocurrency in the market?”

In response to the question, Thakur said that “Presently, there is no separate law for dealing with issues relating to cryptocurrencies”. He further added that due to the “risks and dangers” that come with using cryptocurrency, the government and the Reserve Bank of India (RBI) have been issuing “advisories, press releases and circulars” to the general public.

Reportedly, crypto activities are only actionable offenses, if they violate preexisting laws in India. As such, they can be enforced by entities such as the RBI, the enforcement directorate, and the income tax authorities.

Earlier this month, an unverified copy of a draft bill, called “Banning of Crypto Currency & Regulation of Office Digital Currency Bill 2019”, was uploaded to Scribd by blockchain lawyer Varun Sethi. If this bill ever gets passed, it would mean a ban on cryptocurrencies in India, except for any “Official Digital Currency”. The draft bill defines cryptocurrency as:

“Any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchanged with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes.”