Cryyptocurrency: India to ban exchange-to-exchange transfers, to establish a monitoring system

The Cryptocurrency Regulation Bill, which has not been introduced in Parliament, does not propose a ban on cryptocurrencies. However, there are reports that the exchange-to-exchange  transfers are likely to see restrictions. The government has not made any official statement in this regard. However, some media outlets have quoted sources as saying. Transactions in cryptocurrencies at exchange centers (bourses) will be completely banned. In addition, restrictions will be placed on wallets that hide the identities of crypto currency holders. Google Chrome extensions that connect to 4,000 cryptocurrencies will be blocked.

Sources said that the Indian government is also considering creating an integrated wallet on the lines of a demat account to monitor retail crypto transactions. Crypto exchange centers will have to submit quarterly statements of their transactions to the government. The government will set up a mechanism to control all inbound and outbound transactions of rupee at crypto exchange centers.

If the cryptocurrency is allowed in the country, the central bank will lose control over cash supply and inflation management, warns Former Reserve Bank of India Governor Duvvuri Subbarao. Cryptocurrencies can also disrupt the current credit policy. The Reserve Bank should not lose control of this under any circumstances. Although digital financial transactions have increased in the country, cash is maintained.