Crypto Ban in India 'Difficult to Implement', Says Ashima Goyal of India’s Monetary Policy Committee: Report

The main reason why India will not legalise any cryptocurrency as, as per Goyal, is the possibility of it being misused for unlawful activities.

By Radhika Parashar | Updated: 5 January 2022 20:02 IST

Crypto Ban in India 'Difficult to Implement', Says Ashima Goyal of India’s Monetary Policy Committee: Report

Photo Credit: Unsplash/ Ewan Kennedy

Indian authorities have not yet released rules to regulate the expanding crypto sector

Highlights

MPC is led by the Governor of RBI
Ashima Goyal from MPC says crypto assets must be called “tokens”
India’s stance on crypto sector is awaited

A member of India's Monetary Policy Committee (MPC) has given Indian crypto investors a respite from rumours suggesting that the crypto sector could be totally prohibited in the country. Ashima Goyal, in a recent interview with the Press Trust of India, reportedly said that imposing a blanket ban on crypto-related activities is difficult to implement. The main reason why India will not legalise any cryptocurrency as legal tender, as per Goyal, is the possibility of it being misused for unlawful activities. Cryptocurrencies are not regulated by any financial body in the world and allows hefty cross-border transactions instantly and in an untraceable way.

Goyal refuted to call crypto coins “currencies” in her interview, saying that they are neither adequate nor acceptable as payment options in India as of now.

The economist believes that these decentralised digital assets should rather be called “crypto tokens” and that these tokens must be regulated by the governing authorities of India, the Press Trust of India reported.

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Earlier in November, India listed a crypto-focussed agenda to be discussed in the Winter Session of the Parliament. A “crypto bill” was scheduled to be extended for approval which reportedly called for the ban of all private cryptocurrencies in the country.

According the summary of the bill, the Indian government was planning a "general prohibition on all activities by any individual on mining, generating, holding, selling, (or) dealing" in digital currencies as a "medium of exchange, store of value and a unit of account".

Violating the rules was listed as a non-bailable offense.

The bill however, did not reach Parliament and instead was handed over to the Prime Minister Narendra Modi's Cabinet for approval first.

There has been no word about the document since.

“Only large transactions, from investors who are aware of the risks, may be permitted,” Goyal reportedly said, elaborating on how the cryptocurrencies could work out in the country.

Earlier this week, the Reserve Bank of India (RBI) requested the government to completely ban crypto activities in the nation. Extreme price volatility as well as likelihood of being misused emerged as the top concerns from the RBI.

The chaos around regulating cryptocurrencies in India comes at a time the sector is witnessing rapid expansion in the second most populated country in the world.

Several studies from research firms like Watcher Guru and BrokerChoose have revealed that India has the highest number of crypto investors in the world. The number is said to be around 100 million.

Meanwhile, the year of 2021 turned out to be a milestone for the crypto sector.

Last year, the global crypto market capitalisation rose to $3 trillion (roughly Rs. 2,15,66,720 crore) and created an fresh all-time high so far.

In September last year, while El Salvador legitimised Bitcoin as a legal tender in the country.

However, in the same month, China imposed a blanket ban on all crypto activities, making it a punishable offense.

India's stance on the crypto space remains awaited for now.

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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Further reading: Cryptocurrency, Crypto Ban, Crypto Ban India, Cryptocurrency India

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More