Although, the report is in contrary to reports from December, which stated that different committees of the government opined that cryptocurrencies should be made legal in the country.
An official aware of the subject reportedly informed the Economic Times. It is believed that the government has begun inter-ministerial consultations on the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ draft bill.
Behind the scenes
The committee encompasses the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA), among others.
These departments have reportedly supported the idea to completely ban the sale, purchase, and issuance of all types of cryptocurrency.
According to reports, the committee is considering an option to ban digital currency under the Prevention of Money Laundering Act (PMLA). Due to the fact that digital currency could be used for money laundering.
The Ministry of Corporate Affairs reportedly stated that cryptocurrencies are used in fraudulent schemes to defraud naive investors.
Contrary to expectations
This news runs contrary to reports from December.
In December 2018, it was stated that a governmental committee suggested that cryptocurrencies should be legalized in the country. The governmental committee also stressed that there was a general consensus that cryptocurrency would not be dismissed as completely illegal.
In February, the Supreme Court of India granted four weeks to Indian authorities to come up with cryptocurrency regulation policies. This was supposed to be before the Court would stop hearing crypto-related cases, including parties who demand to reverse the crypto circular released by the Reserve Bank of India.
In the same month, a panel led by Indian Economic Affairs Secretary released a report on the impact of cryptocurrencies. The (IEA) Secretary raised concerns about the impact of cryptocurrencies on the local fiat currency in the case of crypto being adopted for payments.