7 Million Crypto Holders in India Fear Blanket Bitcoin Ban

7 Million Crypto Holders in India Fear Blanket Bitcoin Ban

February 12, 2021

Key Takeaways

  • Indian lawmakers introduced a new bill to ban private currencies in India and issue a new central bank digital currency (CBDC). 
  • A parliament member revealed in a media interview that the bill will prohibit all cryptocurrencies, except CBDCs. 
  • If passed, Indian crypto investors will get three to six months to exit their holdings. 

Indian is moving to ban all cryptocurrencies despite the lack of backing from India’s Reserve Bank, according to recent reports. 

Indian Law May End Crypto Business, Again

On Jan 30., a new crypto regulation bill was introduced for discussion in the current budget session.

The Indian parliament, consisting of elected members from both the ruling party and opposition, conducts debates during three sessions in a year. The first budget session of the year took off earlier this month when the Finance Ministry laid out the plans for this years’ spending and tax collection. 

While cryptocurrency did not feature in its financial plan, the new crypto bill will address the crypto legislation with talks of a blanket ban. 

The finance ministry official told the media that the bill would ban all cryptocurrencies except fiat-backed digital currency issued by India’s Reserve Bank.  According to the law, “transaction directly via foreign exchanges” will be prohibited too. 

Investors will be given three-to-six months to unload their positions.

The bill’s summary in the official document included scope for “certain exceptions to promote the underlying technology.” However, the general view of the ministry seems to stand against it.

According to an estimation, 7 million Indian citizens hold cryptocurrencies worth $1 billion. Thus the law may very well cause the prices to drop.

Disclosure: The author held Bitcoin at the time of publication.

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