After ban of cryptocurrency products in UK, demand for ban grows in India

After cryptocurrency-based products getting banned in The UK, a strong voice is being in India to ban trade in cryptocurrencies. The UK on Tuesday banned some cryptocurrency-based products in order to safeguard retail consumers.

According to the new rule, from next year, firms in UK will not be able to sell, market or distribute products that track prices of crypto-assets. UK’s Financial Conduct Authority (FCA) claimed that the move will safeguard retail consumers as they are exposed to unexpected financial losses due to unregulated crypto-assets. Volatility and unreliable valuations add to retail consumers’ woes. The decision was taken after a year-long brainstorming and review.

According to sources, the Indian government is also mulling to bring in a law to ban trade in cryptocurrency. The trade of these digital currency has seen unprecedented growth in the past few years, especially during the lockdown.
The Supreme Court had in March 2020 set aside a Reserve Bank of India’s circular that prohibited banks and financial institutions from providing services related to cryptocurrencies. In 2018, the RBI prohibited regulated entities from providing services to any individual or business dealing in digital currencies like bitcoin.

Indian and overseas cryptocurrency majors have been waiting for clarity from the government or the RBI on digital tenders following the order.

The government has been holding consultations with law ministry, ministry of information and technology and the RBI for a framework of a law that will formally end trading in cryptocurrency in India, the government official said.

Experts have pointed out several loopholes in the growing trade of digital currencies. Unregulated nature and anonymity is the biggest risk behind such currency.