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Indian Government plans to ban private cryptocurrencies

Indian Government plans to ban private cryptocurrencies

India plans to introduce a new bill to prevent trading and investments in cryptocurrencies through the Budget session of Parliament. Simultaneously, the proposed bill will offer RBI the required legal powers to produce a CBDC, according to the official Lok Sabha Bulletin Part II.

However, the government plans to promote the employment of blockchain over several use-cases. It has determined to join the global race of digital currencies or CBDCs while at the same time forbidding “private” cryptocurrencies such as Bitcoin and Ethereum, amongst others. It is a related approach to that of China, which forbade trading and investments in cryptocurrencies before developing its CBDC.

The government is determined to interject the Cryptocurrency and Regulation of Official Digital Currency Bill. Moreover, 2021 appears a week after the RBI stated it had started investigating the feasibility of publishing and developing a digital currency or digital Rupee. This is a repudiation of the RBI’s position. One can see history repeating itself in India. One can remember the ban proposed in 2018 that left the Indian crypto community dark for almost two years.

Indian traders longing Crypto Regulations

Moreover, the Indian government overturned the earlier ban favoring traders in the prior months of 2020. The crypto traders in India have since been longing for some form of regulation. This, nevertheless, may not be what they anticipated. Provided the history of various crypto prohibitions proposed in India, including a government bill in early 2019 that attempted to outlaw the cryptocurrencies in India collectively and criminalize any possession. However, such bills have formed the pattern of never getting into power.

However, the COVID-19 period appeared to be the long-anticipated era for cryptocurrency to attain a peak into mass adoption. It sees a vast increase in crypto trading volume from India. Moreover, with the bill requiring detailed statements and regulations over the potential ban, it implies an apocalyptic end to India’s cryptocurrency industry. Further, Indian crypto founders are shocked by this news. However, they still expect that the government will operate with the industry to assure that there is some legality to their operations in the future.

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