Government mulls blocking IP addresses of cryptocurrency exchanges: Report

• Follow

With the maze of uncertainty surrounding the future of cryptocurrencies in the country not going away soon, a report in Business Standard quoting a source says the government is mulling blocking Internet Protocol (IP) addresses of cryptocurrency exchanges. In January this year, the government proposed ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ to create a facilitative framework for an official digital currency issued by the RBI” and “prohibit all private cryptocurrencies in India”.

Vikram Rangala, CMO, ZebPay, said “Recent comments by our Finance Minister and others have been so positive. To be honest, we are not worrying about a crypto ban in India anymore. Instead, we are focused on working with the government and other stakeholders to craft positive regulations. Meanwhile, our volumes keep hitting new records, more and more people are opening accounts and large investors are also eager to get in. I think the crypto industry in India is at a turning point and we are optimistic about the future.

Experts feel banning cryptocurrencies would not be so easy as there are various other ways of transacting in virtual currencies.

For example, Indian investors can consider transferring their existing crypto investments into other international wallets. They can also buy cryptocurrencies through overseas exchanges using the liberalised remittance scheme limit of $2,50,000. Otherwise, people may also consider transferring cryptocurrencies to their relatives in countries where trading is allowed. Virtual Private Network (VPN) is also another way through which people can access websites that are otherwise not allowed.

Finance Minister Nirmala Sitharaman recently said there won’t be a complete ban. She also said RBI will be taking a call on the regulation part. While FM’s statement is considered a positive sign by crypto exchanges, there are various media reports suggesting that RBI is seeking a complete ban on virtual currencies.

It is not the first time crypto investors are facing this situation. In 2018, RBI banned all banks from dealing with crypto exchanges which effectively led to the closure of exchanges. A three months notice was given last time to liquidate their investments. The RBI ban was later lifted by the Supreme Court of India in March 2020. Currently, when Bitcoin is trading at an all-time high level of $50,000. If the government brings a complete ban on virtual cryptocurrencies, investors should be given a three-month window again to exit their investments.

While we can only wait and watch till the regulations are announced, one thing is clear that if the complete ban comes through, there will be again an exodus of crypto exchanges from India.