Govt Approves Bill To Ban Unregulated Deposit Schemes; Cryptocurrencies Face Ban in India!

Unregulated Deposit Schemes Bill, 2018, aims to stop such unregulated deposits schemes and also proposes a jail term and/or penalty.

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Govt. Approves The Unregulated Deposit Schemes Bill

Chaired by PM Modi, The Cabinet Committee on Economic Affairs (CCEA) has taken an important decision regarding the future of Ponzi schemes, Chit Funds, and maybe Cryptocurrencies as well.

The powerful committee has approved the Unregulated Deposit Schemes Bill, 2018, which has the power to ban all forms of unregulated deposits in India and also propose penalty/jail who are active in such schemes.

Although the official press note doesn’t mention cryptocurrencies, several mainstream publications have shared that once this bill becomes a law, then digital currencies can possibly face a ban.

No Future for Unregulated Deposit Schemes in India

In the past few years, we have seen a surge in Ponzi Schemes and Chit Funds where the investor is left empty-handed after the promoters run away with their deposits.

Now, such things would be a thing of past.

Unregulated Deposit Schemes Bill, 2018, aims to stop such unregulated deposits schemes and also proposes a jail term and/or penalty.

As per the official statement issued by the Govt., these two bills have been approved:

  1. Banning of Unregulated Deposit Schemes Bill, 2018
  2. Chit Funds (Amendment) Bill, 2018

Now, the same would be introduced in the Parliament, and if approved, would become a law.

The Govt. note said,

“The Bill creates three different types of offences, namely, running of Unregulated Deposit Schemes, fraudulent default in Regulated Deposit Schemes, and wrongful inducement in relation to Unregulated Deposit Schemes.”

Can Cryptocurrencies Face Ban In India?

In reality, things are in an ambiguous mode right now. We again repeat that the Govt. note on the passing of these two bills doesn’t mention ‘cryptocurrencies’ or ‘bitcoins’, or ‘digital coins’ anywhere.

But if we read between the lines, then somehow, the definition of  ‘Unregulated Currencies’ can be linked with cryptocurrencies and digital coins.

ZeeBiz said,

“The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, today gave approval to Unregulated Deposit Schemes Bill, 2018 that seeks to ban all unregulated deposit schemes including Ponzi schemes and the ones linked to cryptocurrencies.”

Hence, in a way, they have directly linked cryptocurrencies with Ponzi schemes, something which even the present Govt. had done, when they labelled cryptocurrencies as Ponzi schemes.

Financial Express, in their report, said,

“With the passage of this bill by both houses of the Parliament, it is likely that Ponzi schemes and dealing in cryptocurrencies will become illegal. “

Earlier, Govt. had already cautioned people at large against using bitcoins as an investment, and have issued several alerts regarding taxation issues as well.

Citi Bank has already banned the purchase of bitcoins using their credit cards, and recently, SBI too issued a similar warning.

We are still seeking more clarification regarding the Govt. note regarding ‘Unregulated Deposits’, which you can find right here.

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