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Centre may block IP addresses of cryptocurrency exchanges

Centre may block IP addresses of cryptocurrency exchanges

Speculations regarding the blocking of IP addresses have come at a time when reports have already surfaced that the Centre will table Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Parliament very soon

Uncertainty around cryptocurrencies in India continues as the government is reportedly planning to block the internet protocol (IP) addresses of firms or exchanges that trade in cryptocurrencies.

Speculations regarding the blocking of IP addresses have come at a time when reports have already surfaced that the Centre will table Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Parliament very soon.

It must be noted that previously the Centre had tried to block the IP addresses of adult sites and hundreds of Chinese applications, but people were still able to access them.

Virtual private networks (VPNs) provide services that are not otherwise accessible. Similarly, industry experts have said the government might succeed in blocking known sources of platforms permitting trading and investment of cryptocurrencies, according to a report in Business Standard. Still, the measure taken will not be foolproof in successfully executing the ban because of VPN other options.

The daily cited an industry expert who said, "Various routes -- like VPNs, peer-to-peer trading, using cash to buy/sell cryptocurrencies and use wallets outside India to store and transfer cryptos, using part of the money permitted to send abroad for investment within the liberalised remittance scheme limit of $250,000 can be diverted for buying cryptocurrencies -- remain loopholes".

The debate over the ban on cryptocurrencies in the country has made many investors anxious. But the Centre had tried to alleviate the concern by giving signals that there won't be a blanket ban on it. Recently, in India Today Conclave, Finance Minister Nirmala Sitharaman made it clear that there will not be a complete ban on cryptocurrencies or at least the technology part of it.

"From our side, we are very clear that we are not shutting all options. We will allow certain windows for people to do experiments on blockchain, bitcoins, or cryptocurrency," Sitharaman said.

However, some reports last week stated that the Centre is likely to propose a law banning cryptocurrencies in India. The bill, one of the world's strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading, and transferring crypto-assets.

If the ban becomes law, India would be the first major economy to make holding cryptocurrency illegal. Even China, which has banned mining and trading, does not penalise possession.

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