India on the Path to Banning Bitcoin and All Other Cryptocurrencies?
A bill has circulated through Indian crypto and financial experts, potentially curbing all digital assets in India.
At the heart of the bill is an attempt to curb all activities related to digital assets. The draft states:
“No person shall mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in the territory of India.”
Exceptions are made for experimental or development use, as well as distributed ledger use in traditional financial services, as long as no crypto assets are changing hands in a peer-to-peer transaction. The bill proposes that the only blockchain-based coin in India may be the Digital Rupee, an asset created and minted only by the Reserve Bank of India.
For offenses against the eventual prohibition, a first-time offender would only receive a fine, but a second-time offense brings a jail sentence of no less than five years.
India has been one of the most active markets for digital assets, before bans and regulations cut the activity of some of the leading brokerages and exchanges. India currently hosts 26 Bitcoin (BTC) nodes, showing significant activity. The prevalent usage of digital coins in the country potentially makes the bill more impactful. However, experts believe it may take a while before it gets passed as an actual law.
The Indian government has also opposed the introduction of Facebook’s Libra, and the Libra Association has answered accordingly, stating it would not release the Calibra wallet to Indian customers.
The Indian bill arrives at a time when digital asset prices have been turning bearish again, and BTC sank under $10,000 twice in July. Still, digital coins offer a way to circumvent traditional finance and revive the grey economy that India has been struggling to eradicate. The government first went after personal cash holdings, and later started to curb digital asset trading.