Trading, mining and holding cryptocurrency could soon be illegal in India as the Indian government is proposing a new Bill that could ban all transactions related to cryptocurrencies.
According to a report by Reuters, the new Bill proposes to criminalise possession, issuance, mining, trading and transferring crypto-assets including Bitcoin, Dogecoin and other cryptocurrencies.
The report further suggests that if this becomes a law it’ll make India the first country to officially make holding cryptocurrency assets illegal.
Interestingly, this move has come after Bitcoin witnessed a fresh surge in prices after Billionaire Elon Musk’s owned Tesla Inc invested $1.5 billion in the cryptocurrency.
Jail Term for Holding Crypto?
In 2019, a government panel had advised 10 years of imprisonment for people who deal in cryptocurrencies. This includes selling, holding, buying, mining, and disposing of crypto currencies.
However, when Reuters asked an official from the government about the jail terms, the official declined to comment but said that the discussions were in the final stages.
In 2018, the Reserve Bank of India (RBI) advised against trading cryptocurrencies citing the risk of increasing cyber frauds. Following which, in 2020 the Supreme Court rules against the RBI ban. “The court ordered the government to take a position and draft a law on the matter,” read a report from Reuters.
Again last month, RBI asked for banning cryptocurrencies citing risks to ‘financial stability’ in the country.
But... What About People Already Holding Cryptocurrency?
Cryptocurrency holders will be given some period of time to liquidate their assets, failing to do so would attract penalties.
However, the exact penalties are yet unknown as there has been no official statement from either the RBI or the Government of India.
India has over 7 million people who have invested more than $1 billion in cryptocurrency and would be hoping for a way to get their money reimbursed before a stringent law is imposed, according to India Today.
‘Not Shutting Windows for Cryptocurrencies’: FM Sitharaman
Union Finance Minister Nirmala Sitharaman, however, clarified that there won’t be a complete ban on the cryptocurrency at the India Today Conclave.
“The government is not shutting all windows for cryptocurrencies, or blockchain, and fintech as yet. My view on this is that, of course, the Supreme Court has commented on cryptocurrency and while the RBI may take a call on official cryptocurrency, from our side, we are very clear that we are not shutting off all options,” she said.
Meanwhile, Sitharaman told CNBC TV-18 that the government is not closing its mind. “We are looking at ways in which experiments can happen in the digital world and cryptocurrency,” she said.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)