India Moves to Ban All Cryptocurrencies

I don't know if this headline sounds funny or shocking to you but that's how cryptocurrecnies are being perceived by Indian Government officials.

After the news came in that leaked some excerpts from a draft bill titled "Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019" a few days back (check details here), it was later confirmed that this draft was actually submitted to the government.

Four days back, Indian government's mouthpiece Rajya Sabha TV broadcasted a panel discussion on this matter:

This broadcast reinstated the seriousness of Indian government regarding banning of cryptocurrencies in the country.

And today, there came the first official confirmation from a government body on the matter of Banning of Cryptocurrencies in India through a RTI reply to Coin Crunch India.

This RTI reply by Investor Education and Protection Fund (IEPF) Authority of Ministry of Corporate Affairs has confirmed that in a meeting held on 24^th January, 2019 under the Chairmanship of its CEO with all concerned departments including Department of Economic Affairs, CBDT, CBIC and MCA, it was unanimously decided that Department of Revenue and Department of Economic Affairs may immediately take steps to completely ban sale, purchase and issuance of all forms and types of Cryptocurrencies.

In this meeting, it was said that cryptourrencies have features of ponzi scheme.

Here is a link to RTI query by Coincrunch:

And the reply received by Coin Crunch India from IEPF Authority is as under:

In this short reply, we do not get the reasoning behind such an approach. The only thing stated is that cryptocurrencies have features of ponzi scheme.

What's a Ponzi Scheme?

an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks

Cambridge dictionary defines it as:

a way of deceiving investors (= people who give money to a company hoping to get more back) by using the money they give to pay interest to existing customers rather than investing it

And Wikipedia says:

A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds.

I don't know what features of it they found akin to cryptocurrencies!
May be, they took into account the rising prices of deflationary currencies like Bitcoin. But what about inflationary currencies? Or what kind of features in pegged stable currencies can be related to a ponzi scheme!

But since this decision doesn't had any participation from stake holders from cryptocurrency industry and not even from the RBI and SEBI, they may easily come to such an erroneous conclusion. But that's how the system works here and it takes a long time to make corrective measures, if any.

So what if Crypto Ban actually becomes a reality?

What I can say that all such bans, if any, will be temporary. It won't take long to understand the power of crypto. Of course, courts, legal processes, understanding and assimilation of new tech in the system may take some time but its acceptance is inevitable. And I'm willing to hodl and wait until that day!

Sign the Petition for Implementing Regulatory Framework for CryptoAssets in India

If you haven't signed it yet, do it here. This is a very detailed petition that describes all related events in India in this sphere, regulations and status in key foreign countries, suggestions for best practices and options available to the government. It seeks to engage the crypto community and the Indian government to a more democratic and collaborative process to establish a conducive and mutually beneficial environment through awareness and right education on this matter.

Many more such efforts will gain momentum with every government move against crypto community in India. We're not going to give up at any cost! Without any doubt, crypto is going to win. Crypto is here to stay as it's the future!