The Reserve Bank of India (RBI) has reportedly called for a complete crypto ban, but legal experts say it is too late.
Legal experts believe it is too late to ban cryptocurrency, despite the government not officially announcing whether it will ban or regulate the technology.
Meanwhile, the Indian government is rewriting the crypto bill before tabling in parliament. Swadeshi Jagran Manch (SJM), an affiliate of the Rashtriya Swayamsevak Sangh, also passed a resolution calling for a crypto ban.
RBI, India’s central bank, and Swadeshi Jagran Manch (SJM) urged to ban cryptocurrency completely. During a recent meeting of the central board of directors, the Reserve Bank of India (RBI) stated that cryptocurrency must be entirely banned and that a partial ban would not work.
Read More: Swadeshi Jagran Manch Seeks Ban On Cryptocurrency In India
Government cryptocurrency legislation must be balanced; this will protect investors and prevent crypto from growing uncontrollably, which would threaten India’s foreign exchange reserves and disrupt its economy.
Lakshmikumaran & Sridharan Attorneys executive partner L. Badri Narayanan said: In addition, the government views cryptocurrencies as investment instruments and plans to regulate them. Under income tax rules, cryptocurrencies may be treated as assets, attracting capital gains. GST and TDS are other areas where the law is not clear.
The legal experts also noted that India’s cryptocurrency approach should not be compared to other developed countries due to differences in foreign exchange regulations.
He explained that it would be difficult for regulators to stop Indians from sending crypto payments overseas, stating: India is a foreign exchange-regulated market, which means we cannot take decisions like developed countries with free markets. Thus, you cannot take money out of India without permission.
According to the publication, goods and services cross-border are classified as imports and exports under FEMA (Foreign Exchange Management Act). A recent IMF report highlighted the need for a global policy on cryptocurrencies, as Gita Gopinath, chief economist at the International Monetary Fund (IMF), said banning cryptocurrencies would be difficult given their decentralized nature. Parliament did not take up the cryptocurrency bill in the winter session, and the government is reportedly reworking it.
