Skip to Content
Blockchain

India might ban cryptocurrency and give its users jail time

July 25, 2019
New Delhi
New Delhi
New DelhiAP

A government panel’s recommendation is only the latest in a series of developments suggesting that India will not be a friendly place for the technology—at least private versions of it.

The news: This week, a panel the government created to study cryptocurrency released its report, which expressed “serious concern” over the “mushrooming of cryptocurrencies almost invariably issued abroad and numerous people in India investing in the cryptocurrencies.” The panel called for a ban on private cryptocurrencies, and said those who use cryptocurrencies should face fines and up to 10 years in jail. 

The backstory: India has one of the world’s largest populations of citizens who don’t have bank accounts. Enthusiasts would say that these are people who could benefit from blockchain-based money and financial services.

But Prime Minister Narendra Modi’s government has repeatedly made it clear that while it is enthused about blockchain technology, it is no fan of cryptocurrency, at least in its current form. In 2017, after surging coin prices sparked a wave of global interest, another panel recommended choking out the trading platforms in the country, according to Quartz. The government never fully implemented that proposal, instead setting up another panel to do further analysis. That’s the group that has just published its much-anticipated recommendations.

It’s okay if the state does it, though. The critical government panel’s problem isn’t with cryptocurrency generally, but with “non-sovereign” currencies specifically, which it called “inconsistent with the essential functions of money/currency.”

Hence the conclusion that “all private cryptocurrencies, except any cryptocurrency issued by the State, be banned in India.” No final decision has been made, but it seems unlikely that India will be a welcoming place for entrepreneurial cryptocurrency development any time soon.

Deep Dive

Blockchain

crypto winter concept
crypto winter concept

Crypto is weathering a bitter storm. Some still hold on for dear life.

When a cryptocurrency’s value is theoretical, what happens if people quit believing?

Neha Nerula
Neha Nerula

The MIT researcher who helps senators understand digital currencies

The MIT Digital Currency Initiative director serves as a crucial link between cryptocurrency developers and central banks around the world.

"Olive Garden" NFTs concept
"Olive Garden" NFTs concept

I tried to buy an Olive Garden NFT. All I got was heartburn.

Our newest issue spells out what you need to know about the dizzying world of digital money.

mazacoin illustration
mazacoin illustration

He created an indigenous digital currency. The dream is still alive.

For the creator of MazaCoin, the dream of a sovereign monetary system for indigenous people is still alive, but it looks different than it did 10 years ago.

Stay connected

Illustration by Rose WongIllustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.