The Indian government is discussing placing a ban on cryptocurrency trading, according to Moneycontrol. In March this year, the Reserve Bank of India (RBI) initiated the idea. It forbid financial and banking institutions from working with cryptocurrencies. However, there was no law as such until now.
It seems that the discussion of the cryptocurrency ban in India is not new at all. Already in June this year, The Economic Times reported the governmental idea of establishing a ban on crypto. Although the RBI first proposed the ban, having a legal framework could be seen as more effective.
The ban on cryptocurrency trading will be unfortunate for the thousands of traders and investors who joined the cryptocurrency platforms during the Covid-19 lockdown. After the first decision to place the ban on crypto assets, the trading volume skyrocketed. Only on the exchange WazirX trading volume increased by 400%.
As people were worried about the stability of traditional assets amidst the economic crisis caused by the Covid-19 pandemic and lockdowns, many chose cryptocurrencies as their main investments. It is understandable that the government needs to establish some regulatory framework on digital currencies. However, a complete ban on trading could ruin the hopes of many investors, especially those who just started exploring crypto assets.