Will Narendra Modi’s BJP Ban Crypto In India?

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Last Updated on 24 August 2020 by CryptoTips.eu

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A question being raised on a growing number of media outlets worldwide is what the Indian parliament will shortly decide when it comes to matter of crypto. Given the sheer size of the country and its enormous economic potential, a ban on crypto would be a devastating blow to the numerous small companies that have sprung up in recent months.

However, according to political commentators in India, the government of Prime Minister Narendra Modi, whom is identified as a supporter of blockchain, plans indeed to submit exactly such a bill to parliament.

They are furthermore scheduled to do so just before the November holiday season. If the bill would be enacted, it would either ban or regulate cryptocurrencies in the Indian subcontinent.

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Supreme Court ruling

As the Indian Supreme Court decided in a landmark ruling this year that the two-year old ban on crypto trading could be lifted, many around the country’s financial capital Mumbai set up small companies that allowed Indians to invest in all things crypto.

Although the volumes of Indian Rupee being transferred into Bitcoin, Ethereum or other altcoins is still small, the growth of several small crypto exchanges in only a few months has been remarkable. Even crypto mining firms are still operating in legal limbo, as it is unclear whether Bitcoin mining is actually legal in India, just as Coindesk asked a few weeks ago.

Many financial analysts are therefore stating that it would be foolish for the BJP (Bharatiya Janata Party), which has a working majority in the Lok Sabha (Parliament of India), to destroy a thriving and growing new branch of industry.

On the other hand, allowing crypto trading in India to continue unregulated might provide an escape route to anyone wanting to hide revenue earned from the government.

2016 Indian banknote demonetisation

Back in 2016, Prime Minister Narendra Modi had famously enacted a ruling that would immediately curtail the so-called shadow industry of his country and deal a decisive blow to anyone wanting to escape government taxes.

The Government of India announced the demonetisation of several popular banknotes that people would trade between themselves rather than deposit them at a bank, where the state could track it. The move was aimed at stopping the spread of “black money”. As a result, tax collection went up in the years thereafter.

Government supporters of the BJP are therefore claiming that allowing the crypto industry to continue to operate unregulated in India, would be another invitation for a further “shadow economy” to emerge.