An Indian government official, Shri Subhash Chandra Garg, the Secretary of Department of Economic Affairs, has said that cryptocurrencies should be banned. However, he was of the opinion that Distributed Ledger Technology (DLT) must be encouraged.
The Secretary voiced his views in a meeting of the Financial Stability and Development Council which was chaired by Finance Minister Arun Jaitley
The issue was discussed in the meeting because the Indian Supreme Court has given a two week time frame for the government to come up with clear cut views and policies on the nature of cryptocurrencies. The Indian government has subsequently outlined how it will “devise an appropriate legal framework to ban [the] use of private cryptocurrencies in India.”
A local group of crypto advocates, calling themselves Crypto Kanoon (Crypto Law) had filed a petition in court after the Central Bank of India had banned all financial institutions from supporting crypto transactions by any entity, individual or organization.
The main stance of the government has been so far that cryptocurrencies bypass official channels, encouraging the use for money laundering and other criminal activities.
Activists have questioned the logic, saying that by banning cryptos, the government may have stopped local exchanges from operating, but offshore ones like LocalBitcoins.com has seen a boom from Indian traders. The activists argue that instead of having local exchanges perform trades with due diligence, the government is ironically pushing cryptos towards the very untraceable trades it fears.
The Indian court has given the government two weeks to come with a policy on cryptocurrencies. The time will end on November 10th. Crypto advocates have already amassed 44 thousand signatures on their petition and the numbers are growing.
India is home to a very large online industry, with people thousands of people employed in the blockchain sector. The decision to ban cryptos will negatively affect a shaky, but booming industry.