- India plans to introduce a bill that will ban “all private cryptocurrencies.”
- The bill which will be introduced later this month is to also prepare the ground for India’s digital currency.
- The country has been tending towards the move for a while amidst concerns of investor safety.
India has again revealed plans to take action against the burgeoning cryptocurrency industry in the country. According to the parliamentary agenda of the country for the winter session, there are plans to introduce a bill that will restrict the trading of “all private cryptocurrencies” in the country.
The Indian government said that the proposed bill titled “Cryptocurrency & Regulations of Official Digital Currency Bill 2021” will also lay down the framework for the introduction of the official digital currency of the country that will be issued by the Reserve Bank of India.
According to a Reuters report, the bill that is set to be deliberated on any day from the 29th of this month which is the start of the winter parliamentary session of the country is likely to allow only certain cryptocurrencies to be traded in the Asian country.
Reuters adds that by industry estimates, the crypto holdings of Indians were around $5.39 billion, held by around 15 to 20 million crypto investors. This year has also seen local cryptocurrency exchanges including CoinDCX, backed by B Capital, and CoinSwitch Kuber, backed by a16z and Coinbase Ventures, achieve unicorn status this year.
The government of India has for a while expressed concerns over the proliferation of crypto trading in the country. India’s prime minister Narendra Modi is one of the government officials to express such fears. In a meeting chaired by the prime minister, the consensus reached was that irresponsible advertising of cryptocurrencies was misleading youths to expect unrealistic gains from crypto investing.
Added to that, the Reserve Bank of India’s governor, Shaktikanta Das, has expressed concerns about the use of crypto in money laundering and financing terrorism, as well as concerns from “the point of view of macroeconomic and financial stability.”
There have already been several other times when there were talks to introduce bills that would put the crypto industry in check. A previous proposal intended to outlaw ownership, transferring, and trading of cryptocurrencies.
India is joining a host of other countries including China and Nigeria that have introduced harsh regulations of cryptocurrencies in the build-up to the introduction of their digital currencies. China’s crackdown on the crypto sector is still ongoing and has seen a lot of crypto companies exit the country. India could see a similar capital flight if they push their agenda. Alternatively, cryptocurrency trading may be driven underground just as restrictive regulations have resulted in Nigeria where peer-to-peer has seen increasing figures.