Fears became reality when the Reserve Bank of India’s Board of Directors voted in favor of the crypto ban and commented that a partial ban on cryptocurrencies in the country would not serve the purpose and it is essential that the ban should be expanded in entirety. The bank also raised serious objections and concerns with regard to the Indian crypto market. Considering recommendations from the Reserve Bank of India, the Government is revisiting the crypto law for making necessary amendments.
When the Government of India announced that it will be drafting and implementing crypto regulations, the Indian crypto industry became concerned. They grew fears that once again the Government will impose a crypto ban for a time unknown. However, top officials from the Indian Government promised the Indians that at least a ban will not be put in place.
Currently, Indian Parliaments are sitting in session within which one of the agendas includes crypto regulation. The Parliamentarians have already started debating on crypto regulation and the Reserve Bank of India (RBI) is also part of the debate. Meanwhile, RBI has convened its 592nd BoD meeting under the auspices of RBI’s Governor, Shakti Kanta Das. RBI’s is the highest authority within the bank whose forms policies and is entrusted with decision making. The Governor also has a veto vote in case there is a deadlock.
In the meeting of RBI’s BoD, the issue of crypto was also discussed. The majority of the Board recommended that a ban on cryptocurrencies should be implemented throughout the country. The Board also discussed the possibility of imposing a ban partially. However, the majority of members denied that either there has to be a ban in entirety or none at all. The partial ban will not serve the purpose and in fact, will become an issue involving the general public. Therefore, all the members on the Board of RBI voted in favor of the complete ban.
However, the advice of RBI’s Board is only a recommendation and is not a decision to be followed. In any case, the concerns and objections of RBI’s Board have been duly noted by the Indian Government. Later on, the Indian Government issued a statement saying that it has been revisiting the crypto draft proposal. It said that the concerns raised by RBI are genuine and must be considered. It is essential therefore that the draft proposal should be revisited for incorporating further amendments in accordance with RBI’s recommendations.
It was obvious that RBI was having its concerns over the issue of crypto for a very long time. Time and again, RBI had warned Indian crypto investors about the volatility of cryptocurrencies and their misuse. But even then Indian crypto market continued to flourish and became one of the world’s fastest-growing crypto markets. Banning crypto in India is however going to be very discouraging for Indian crypto investors.