Crypto investors in India were left speechless after it was announced that the Indian government was set to submit a bill that would effectively ban most cryptocurrencies. The bill is the same draft from earlier in January. However, crypto fans expected the bill to be changed to be more accommodative of the asset class. Now, all eyes are on the bill as it will be submitted and discussed next Monday during Parliament’s winter session.
The bill is titled “The Cryptocurrency and Regulation of Official Digital Currency.” It seeks to create a framework for the Reserve Bank of India to issue an official digital currency. Additionally, the bill will ban all private cryptocurrencies, such as Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD), except for “certain exceptions to promote the underlying technology of cryptocurrencies and its uses.”
Fans of crypto were obviously not happy with the potential India crypto ban. However, the bill will allow India to regulate an industry that often attracts money laundering and scammers.
Let’s take a deeper look into what the bill means for crypto investors.
The India Crypto Ban: What You Should Know
- The new rules stated in the bill will discourage marketing and advertising of cryptocurrencies.
- Out of a total population of 1.4 billion people in India, there are an estimated 15 million to 20 million crypto users. Additionally, that population has total crypto holdings estimated at $5.3 billion.
- Furthermore, the Reserve Bank of India will likely launch a central bank digital currency (CBDC) by December.
- Indian Prime Minister Narendra Modi stated that democratic nations should work together so that crypto “does not end up in wrong hands, which can spoil our youth.”
- However, those in opposition of the bill believe that if India bans crypto, massive consequences will follow. Among those potential consequences, some believe the country will fall behind the technology curve, miss out on potential blockchain innovations and experience potential brain drain.
- Additionally, officials from India’s finance ministry are considering a framework that would treat cryptos more like commodities than currencies.
- Finally, in March 2020, India’s supreme court overturned a blanket ban on crypto imposed by the central bank. However, this new bill may successfully ban all private cryptos.
On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.