India is set to propose a law banning Bitcoin, again.
According to a March 15th Reuters report, a local government official said that the upcoming bill is one of the world’s strictest policies against bitcoin and other digital assets. The new rules would criminalize the possession, issuance, mining, trading and transferring of bitcoin and altcoins.
According to information shared with Reuters by the government official, Bitcoin holders would have up to six months to liquidate their holdings before the restrictions become effective. This is in line with a February 5th report by Business Standard, in which Deputy Governor BP Kanungo of the Indian central bank suggested that the institution was deliberating whether to create a digital rupee. The report suggested that Prime Minister Narendra Modi’s government was prepared to pass a bill that sets the ground for a digital currency while banning bitcoin.
Many remain skeptical when it comes to the prohibition efforts of the Indian government. Obi Nwosu, CEO and co-founder of U.K. Bitcoin exchange Coinfloor, predicted last month that India's ban will not be successful and will "provide a compelling case study highlighting the empowerment that Bitcoin brings to the underprivileged, and those who have most to lose from inflation."
Indian investors reportedly hold 100 billion rupees ($1.4 billion) in digital assets investments, split among eight million investors. India's Bitcoin industry is booming, with user registrations at local crypto exchange Bitbns up 3000 percent compared to just a year ago, and major local bitcoin trading platform Unocoin having added 20,000 users in January and February alone. Local crypto investor Sumnesh Salodkar told Reuters:
The money is multiplying rapidly every month and you don’t want to be sitting on the sidelines. [...] Even though people are panicking due to the potential ban, greed is driving these choices.
According to a report published earlier today by English-language local news outlet Deccan Herald, Finance Minister Nirmala Sitharaman said that the government will still allow blockchain technology and certain aspects of cryptocurrency. She said:
From our side, we are very clear that we are not shutting all options. We will allow certain windows for people to do experiments on the blockchain, bitcoins or cryptocurrency.
In 2018, India's central bank issued an order forbidding banks from dealing in cryptocurrencies. The order was struck down by India's Supreme Court last year.