A formal ban will last a long time. India in 2018 rejected the cryptocurrency as legal tender and recommended banning existing digital cash with imprisonment for up to ten years for offenders. The Reserve Bank argued that the currency was not real because it had no physical counterpart and was not stamped. The country’s Supreme Court sided with the objectors in 2020 and allowed trade, but it was not expected to be lasting.
It would not be difficult to see why India wants to ban private crypto in favor of a government solution. An official currency will give the country more control that limits foreign influence, but it will also provide the kind of stability that comes with conventional money. Prices for Bitcoin and similar currencies are still likely to fluctuate, and it is more prone to manipulation. In theory, India can only accept the digital currency without some of the pitfalls.