According to a recent report by Reuters, the dreaded draft law for the India crypto ban is in its final stages. The news agency cited an unnamed government official familiar with the legislation, who stated that the government plans to fine anyone trading or even holding crypto in India. The legislative bill also seeks to criminalize the mining, issuance or transfer of digital assets.
If implemented by Prime Minister Modi’s majority-controlled parliament, the bill would introduce the most restrictive policies against digital assets in the world.
According to the unnamed government official, law enforcement agencies would offer a six-month grace period to all crypto holders to liquidate their holdings, after which punitive fines would be levied.
The move is in line with earlier government efforts to rein in private virtual currencies while offering India’s Reserve Bank (RBI) the framework to develop a central bank digital currency.
A blanket ban on crypto that targets traders and miners would be a massive blow to the millions of Indians eager to cash in on the blossoming crypto space.
India’s Crypto Ban Is Exaggerated, says Official
The crypto regulatory environment in India is terribly confusing for investors and industry stakeholders.
In 2018, the RBI issued a circular banning financial institutions from offering services to businesses dealings in digital assets. The directive threatened to block the onramp to crypto and received a lot of pushback from industry players.
Fortunately, the country’s Supreme Court overturned that ban, asserting that the RBI didn’t have the mandate to issue such a ruling in the absence of legislation.
That temporary respite opened the cryptocurrency floodgates, but regulators were already working on a new draft proposal to eliminate crypto permanently.
The central bank justifies its war on crypto by claiming that the asset class would undermine the current monetary system.
In yet another twist to the crypto regulatory saga in India, the nation’s Finance Minister has revealed that the crypto ban has been blown out of proportion.
In a March 6 interview with CNBC, Finance minister Nirmala Sitharaman explained that the government doesn’t plan to ban crypto completely. She added that the emerging industry’s final regulations wouldn’t be as “severe” as reported by media outlets.
“I can only give you this clue that we are not closing our minds, we are looking at ways in which experiments can happen in the digital world and cryptocurrency,” she told CNBC.
A Rising Crypto Appetite
Despite the constant threats from regulators, individuals in the Asian nation are betting big on the digital asset class rather than panicking due to the potential ban.
Per unofficial industry estimates, crypto investments in the country have risen to $1.4 billion, with many investors refusing to sit on the sidelines amid a worldwide crypto boom.
Money inflows and user registrations at Bitbns are up 30-fold from a year ago, according to the local crypto exchange’s CEO, Gaurav Dahake. Moreover, Unocoin, India’s first crypto exchange, added over 20,000 users to its platform in the first two months this year despite rumors of a ban.
