India Plans to Ban ‘Private Cryptocurrencies’ with Few Exceptions

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The India government was never thrilled about the ongoing crypto boom in the country. With an estimated 15-20 million crypto investors in the country, it’s safe to say that crypto trading in India is very much alive. The government couldn’t stay deaf to all the calls for regulation, but so far, it’s been very negative in terms of crypto regulation.

The Reserve Bank of India has always been against the idea, warning investors to stop pouring money in the crypto market. In the past year or so, India has been juggling the idea of a digital currency of its own supported by the ROI. Earlier this week, the Indian government unveiled plans for a new law that will ban most ‘private cryptocurrencies’ with very few exceptions.

A Facilitative Framework for a Digital Currency Already in the Works

Indian lawmakers have been discussing the idea or banning cryptocurrencies for a while. The Reserve Bank of India has assessed the risk of cryptos while also trialing the idea of a government-backed cryptocurrency. On Tuesday, government officials said that there’s already a facilitative framework in place that will introduce India’s brand new, ROI-backed digital currency.

That’s not what crypto investors in the country were looking for, but that’s probably what they about to get. A new bill will be listed during the winter parliamentary sessions this year, and the government plans to pass it.

With this bill, the government will limit the use of private cryptocurrencies, allowing only a few to promote the blockchain and its uses. It’s still unclear what does cryptos will be. The law will effectively regulate and prohibit virtual currencies during the winter session of the parliament, adding fuel to the rumors that Bitcoin could be banned in India.

This isn’t what investors and crypto traders have been hoping for. In past months, local cryptocurrency exchanges have seen a soaring transaction volume, recording record capital. High profile investors are drawn to Bitcoin in India, and some crypto exchanges turned unicorns this year. It’s clear that Indians love to pour money into cryptos, but that might soon come to an end.

A Huge Market

According to estimates, there are around 15-20 million crypto investors in India, so it’s obviously a huge market. There has been an increasing number of Indians pouring money into Bitcoin and altcoins after never having invested a single Rupee into stocks or any other asset. The cryptocurrency craze has reached this part of Asia, and the government isn’t too happy about it.

Just like many others, India is looking to regulate the market and protect its citizens from losing money. Bitcoin’s high volatility has been cited as a major concern by the ROI. Just like in other countries, the government’s response will be a digital currency, which, of course, isn’t the solution to the decentralized nature of cryptos.

It remains to be seen if lawmakers in India are bent on delivering a new bill or they’re just trigger-happy like they’ve been before.

November 24, 2021: • No Comments

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