It seems that the Indian government looks all determined to ban cryptocurrency operations in the country. Citing sources and officials familiar with the matter, BloombergQuint reported that India is likely to proceed with a complete ban on crypto investments.
Requesting for anonymity, a senior Finance Ministry official told the publication that cryptocurrency usage in any form will be banned under the new law to be introduced in the parliament. This would also include a ban on transacting directly via foreign exchanges.
However, this ban won’t be an overnight regulation passed. Meaning, once the law comes into effect, investors will get 3-6 months of transition period to completely liquidate their investments.
While the final decision is yet to come, it looks like the government of India is looking to adopt a China-like model wherein it introduces if official CBDC user central ban – Reserve Bank of India (RBI).
The Indian government has recently listed The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. The purpose of the bill states:
“To create a facilitative framework for creation of the official digital currency to be issued by the RBI. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
Indian Crypto Industry Watch Developments Closely
Over the last three years, the Indian crypto industry and investors have been kept on the edge by RBI as well as the government. The lawmakers’ inaction and indecisiveness on crypto rules have kept investors worried. Unocoin co-founder and chief executive officer Sathvik Vishwanath said:
“We’re all waiting for details (of the proposed law) to come out to determine our next course of action. If government goes ahead with banning all cryptocurrencies, except the one backed by the state, it will not make sense to continue our business in India. But we’ll have to wait and watch.”
Over the last few months, Indian investors have shown huge interest in crypto investments. Although the net crypto investment from Indian investors is just $1 billion, it’s growing at a quick pace.
While the fears of the ban are hovering around, investors are still not using to liquidate their holdings as they understand that they would get time to liquidate. The American corporates have shown a massive interest in cryptocurrencies recently as it could take markets even higher.