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In India, uncertainty around cryptocurrencies continues as the government is now planning to propose a new bill which would penalize anyone trading in the country or even holding or trading the digital asset.
A senior government official told Reuters that the new bill proposes to criminalise possession, issuance, mining, trading and transferring crypto assets. Should the bill be passed, India will become the first major economy to criminalize cryptocurrency.
According to the official, the proposed law will give investors a window of six months to liquidate their assets before a penalty can be expected. It is estimated that in India more than $1 billion is invested in cryptocurrency by over 7 million people. While the proposed bill is intended to ban private crypto assets, it will leave blockchain technology untouched and even promotes the technology. This may seem quite contradictory, and the industry remains hopeful that the government will not push thru on the ban and just ends up with new regulation on trading.
India has been in choppy waters over cryptocurrency in the past months. The current situation has become very confusing for stakeholders due to the opposing sentiments of government officials.
It is no secret that Reserve Bank of India, the autonomous authority on monetary policy, and the Finance Ministry do not go well and have clashed before. The Reserve Bank of India is preparing for a Central Bank Digital Currency and was cited that there is glooming risk of financial instability from cryptocurrencies.
Minister of Finance and Corporate Affairs Nirmala Sitharaman just said over the weekend that the government is not planning to completely bar cryptocurrency trading.
“We will allow a certain amount of a window for people to experiment on blockchain and Bitcoin,” Sitharaman said. She further said that a Cabinet bill on cryptocurrency is nearing completion and that the government is not “shutting off all options.”
Earlier in the month Sitharaman had said that “there will be a very calibrated position taken” on cryptocurrency.
For now, we will have to wait and see. Indian investors do not yet seem to panic over the news. One investor said that in case the law passes they will have to comply, but “until then, I’d rather stack up and run with the market than panic and sell,” he said.