The government is considering blocking internet protocol (IP) addresses of companies/exchanges on which trading in cryptocurrencies is happening, said a source in the know. Two months ago, the government had said it intended to bring a Bill to ban private cryptocurrencies and introduce India's own digital currency in line with what China and other countries had done. This move is part of that. The government had also proposed to promote technology like blockchain. Industry, however, says banning decentralised currencies like bitcoin and ethereum is not possible.
'These provisions may even be seen to be a threat to burgeoning businesses, since they would view every announcement of a rate cut as a starter's pistol that triggers a long race to adjust prices and to justify the adjustment,' argue Rashmi Deshpande and Anjali Krishnan.
Tax experts say one of the most dispute-prone proposals is making "fraudulent availing" of input tax credit (ITC), without an invoice or bill, a cognizable and non-bailable offence.
Indian banks have started exploring opportunities in the space, including lending to crypto exchanges, and accepting bitcoins as collateral, among others.
Ahmedabad-based crypto firm Kali Digital Ecosystems' plea against the ban will be heard on July 20.
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