India is working to bring a formal order to ban holding, mining and trading cryptocurrency.
The measure is in line with government agenda that called for banning private virtual currencies while building a framework for an official digital currency. But recent government comments raised investors’ hopes that the authorities might go easier on the booming market.
The law which is expected soon and will ban cryptocurrencies such as Bitcoin, Ethereum and Litecoin.
Once this law is implemented, it will mean that holding, trading or mining cryptocurrency will become illegal in India. There are expected to be provision for criminalizing any possession, trading, issuing, mining or transferring cryptocurrency assets in India and a jail punishment of upto 10 years.
Once the proposal becomes a law, India will become the first major economy in the world to make holding cryptocurrency assets illegal.
China has banned mining and trading cryptocurrency but allows citizens to continue to possess whatever crypto assets they may already have.
According to Reuters, India’s investment in cryptocurrency was pegged at USD $1.4 billion.
In 2019, the Reserve Bank of India had issued a circular which confirmed that regulated entities in the country cannot provide cryptocurrency services in the country. However, in 2020, the Supreme Court of India struck down this law.
Bitcoin, the world’s biggest cryptocurrency, hit a record high $60,000 on Saturday, nearly doubling in value this year as its acceptance for payments has increased with support from such high-profile backers as Tesla Inc CEO Elon Musk.
“The money is multiplying rapidly every month and you don’t want to be sitting on the side-lines,” said Sumnesh Salodkar, a crypto-investor. “Even though people are panicking due to the potential ban, greed is driving these choices.”
User registrations and money inflows at local crypto-exchange Bitbns are up 30-fold from a year ago, said Gaurav Dahake, its chief executive. Unocoin, one of India’s oldest exchanges, added 20,000 users in January and February, despite worries of a ban.
ZebPay “did as much volume per day in February 2021 as we did in all of February 2020,” said Vikram Rangala, the exchange’s chief marketing officer.