India considers an outright ban on cryptocurrencies

India, the country with one of the most active market for digital assets, might implement an outright ban on cryptocurrency trading, according to the sources cited by a local media outlet The Economic Times on April 25. 

The government has initiated a round of inter-ministerial consultations on a draft bill called  “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019”. The document has been forwarded to all relevant departments for consideration.  

However, the law won’t be passed until the next government takes charge after elections at the end of May.  The final decision will be based on the obtained feedback by the above said departments. Some of them, including the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) support the ban on  “sale, purchase and issuance of all types of cryptocurrency” and believe that the government should have taken actions against cryptocurrencies much earlier. 

The authorities believe that the cryptocurrency trading may be banned under Prevention of Money Laundering Act (PMLA), while the Ministry of Corporate Affairs is concerned that digital money are used in fraudulent schemes to “defraud gullible investors”.