Indian Officials Consider Ban on “Private Cryptocurrencies”

Agents of the Indian government have met to formally discuss a possible ban on private cryptocurrency holdings in the nation.

On October 30, 2018, the Financial Stability and Development Council (FSDC) issued a press release detailing their recent meeting where they “reviewed the current global and domestic economic situation and financial sector performance.”

The council seemed deeply concerned about “the need for identifying and securing critical information infrastructure,” under the guise of “strengthening security in the financial sector.”

To this end, the report mentioned a deliberation “on the issues and challenges of crypto assets/currency, and was briefed about the deliberations of the High-Level Committee … to devise an appropriate legal framework to ban use of private cryptocurrencies in India and encourage the use of distributed ledger technology.”

It should be noted that the council appears to refer to “private cryptocurrencies” as coins that operate on an open-source, permissionless blockchain, and this classification should not be confused with privacycoins, a subset of cryptocurrencies that focus on anonymous transactions.

This stance on the different applications of blockchain technology seems to be an unfortunately common one across different major economies worldwide. Earlier this year, China began to make public its support for the applications of distributed ledger technology, while continuing to remain either silent or generally negative on the prospects of a truly decentralized currency.

The Indian government has recently shown several indicators of a growing hardline stance on cryptocurrency, with the Reserve Bank of India (RBI) banning crypto exchanges in July 2018, and the proprietor of a Bitcoin ATM in Bangalore being arrested in late October.

Other than these general trends in Indian policy, however, crypto speculators abroad have little to go on. The FSDC’s report did not elaborate on their intended meaning of “use,” or whether this means a proposed ban on trading, holding, mining or any other possible interactions with cryptocurrency networks.

It is unclear the extent to which the Indian government will clarify its overall intentions toward cryptocurrency in the days to come.