The first time Indian regulators took notice of cryptos was back in 2013 in the RBI's Financial Stability Report. At that time, RBI had said the bank would want to investigate the risks posed by virtual currencies.
In April 2017, the union finance ministry constituted an inter-disciplinary committee and by July 2017 the committee had suggested that a clear warning should be issued to stop holding and trading of virtual currencies.
In December 2017, a fresh warning was issued by RBI and the finance ministry clarifying that virtual currencies are not legal tender. In March 2018, CBDT submitted a draft scheme to the finance ministry for banning virtual currencies.
A month later, RBI issued a circular that restrained banks and financial institutions from providing financial services to virtual currency exchanges.
In April 2018, the finance ministry appointed committee came out with its initial report and proposed a draft bill for the regulation of virtual currencies but did not recommend a ban. However, in February 2019 the committee proposed a fresh draft bill and recommended a complete ban.
But, in March 2020, the Supreme Court struck down the RBI circular which had barred banks from extending financial services to virtual currency exchanges.
Now with the Parliament due to consider a bill on cryptos, speculation is rife on whether an absolute ban is in the works.
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