Well, we knew there was a chance something like this was coming and here it is, but brother is it going a lot further than I ever thought it would. A government backed committee in India has recommended that the country issue a ban on all “cryptocurrencies created by non-sovereigns” and, get this, they said anyone caught buying, selling, or otherwise dealing with cryptocurrencies could face heavy fines and up to 10 years in prison.
Last April, the Reserve Bank of India (RBI) asked Indian banks to stop dealing with any cryptocurrency businesses, setting a virtual ban on crypto trading. However, it’s still legal to use peer-to-peer trading for cryptocurrencies in the country. At least for now anyway.
You can read the entire panel report here and it will be examined by regulators and the government before becoming final and taking effect, but there are a few highlights that caught my eye straight off. First, the report puts forth a definition of cryptocurrencies as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value.”
In defining their reasoning for the ban, the report states that they noted “with serious concern mushrooming of cryptocurrencies almost invariably issued abroad and numerous people in India investing in these cryptocurrencies. All these cryptocurrencies have been created by non-sovereigns and are in this sense entirely private enterprises.”
It goes on to say that the Committee believes that cryptocurrencies cannot serve the purpose of a currency, shouldn’t be allowed and that “private cryptocurrencies are inconsistent with the essential functions of money/currency, hence private cryptocurrencies cannot replace fiat currencies.”
While calling for the outright ban of cryptocurrencies and threatening to imprison anyone caught dealing with them, the report voiced support for the possibility of a state-issued digital Rupee for the country.
So, the technology is okay as long as there’s a centralized government behind it… riiiiiiight!
Furthermore, the report calls for specific legislation to promote and regulate the use of blockchain technology in financial and associated fields, but then praises distributed ledger technology, saying that it’s “an important and innovative technology, which will pay a major role in ushering in the digital age.”
With Trump’s recent negative stance and Facebook facing pressure from Washington over the planned Libra and Calibra, India jumping in with this hard of a stance could have reverberations around the world. This year has been a little nuts, to say the least, and as I keep finding myself saying almost weekly… the next few weeks and months are definitely going to be interesting.