India’s Crypto Ban: Breaking Down the FUD

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A recent article by Bloomberg Quint reveals pictures of a supposed draft for a bill to ban cryptocurrency in India and offer a 1-10 year jail term for mining, holding, or using crypto. The India crypto community outraged at this speculation as it was published without citing a legitimate source, June 7, 2019.

The Indian Media and Crypto

In a country with nearly 1.3 billion people and thousands of news outlets that deliver information to people, the media plays a massive role in determining how the average person thinks. Media coverage for cryptocurrencies in India tends to focus on the negatives, very occasionally mentioning bullish price movements, but never really covering the positive aspects of a decentralized economy.

An article by Bloomberg Quint has sent Indian crypto enthusiasts into a frenzy of anger. The article used pictures of a supposed bill being drafted by the Ministry of Finance titled ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’.

For starters, a snippet of the bill shared by the author shows that cryptocurrency use regarding activities covered in a previous section is illegal. The details regarding that section of the bill are unknown so there is no way to understand what activities are encompassed by it.

Secondly, the format of the bill doesn’t match the way the Ministry of Finance usually frames its policy. The lack of underlined words in headers is the first giveaway, but the biggest blunder on this seems to be the use of ‘arrangement of clauses’ whereas most bills use ‘arrangement of sections’.

This doesn’t mean there was any misappropriation as it is unlikely that a person would post counterfeit government documents just to gain traction, but it is something to consider when you look for legitimacy in the document itself. Moreover, the fact that this is merely a draft and not a bill that has been passed in parliament to be made an act of law could also be a reason for the format discrepancy.

Community Reaction

Nischal Shetty, the co-founder of WazirX, is by far the most active Indian crypto personality, tweeting the Prime Minister and his cabinet to consider regulation for cryptocurrency on a daily basis. Nischal, while not commenting on the legitimacy of the documents, implied that if this bill was real, nothing can be ascertained until the section outlining the activities that are prohibited are revealed.

There’s no way to ascertain if this is real or just FUD, taking into account the current stance of the government. Cryptocurrency is not illegal in India; the RBI has asked banks to not facilitate transfer to and from firms dealing in cryptocurrency.

Despite the approach the current government has shown, most of the Indian crypto community is quite confident that the government will not go down the authoritarian route of outright banning cryptocurrency.

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