New Delhi is planning to propose a new law that will ban cryptocurrencies and fine anyone trading or even holding digital assets in the country, a senior government official told Reuters.
The measure is in line with a January government agenda that called for banning private virtual currencies such as bitcoin. The authorities are also trying to set a framework for an official digital currency.
The unnamed official said that the bill would give holders of cryptocurrencies up to six months to liquidate, after which penalties will be levied. He also pointed out that the plan is to ban private crypto-assets while promoting blockchain. “We don’t have a problem with technology. There’s no harm in harnessing the technology,” said the official, adding the government’s moves would be “calibrated” in the extent of the penalties on those who did not liquidate crypto-assets within the law’s grace period.
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If the ban becomes law, India would be the first major economy to make holding cryptocurrency illegal. China has already banned its mining and trading but does not penalize possession.
According to industry estimates, some eight million investors in India now hold 100 billion rupees ($ 1.4 billion) in crypto-investments, despite the government’s threats of a ban.
“The money is multiplying rapidly every month and you don’t want to be sitting on the sidelines,” crypto-investor Sumnesh Salodkar told Reuters, adding, “Even though people are panicking due to the potential ban, greed is driving these choices.”
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User registrations and money inflows at local crypto-exchange Bitbns are up 30-fold from a year ago, according to its chief executive Gaurav Dahake. Unocoin, one of India’s oldest exchanges, added 20,000 users in January and February, despite concerns of a ban.
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