India Plans to Ban Private Cryptocurrencies Like Bitcoin

Cryptocurrency investors in India are concerned that the country’s parliament will consider a government-backed bill to ban “private” cryptocurrencies.

February 1, 2021 | AtoZ Markets – At the end of last week it became known that the legislators considered draft law on the regulation and cryptocurrency official digital currency in 2021 prohibits the use of cryptocurrency in India and provide the basis for the creation of an official digital currency, which will be released by the Reserve Bank of India (RBI).

India’s Proposed Cryptocurrency Ban Has Investors Nervous

According to experts, the government’s definition of “private” cryptocurrency means that any digital currency issued by a non-government can be considered “private”, including Bitcoin.

Read also: Indian Regulator Proposes 18% Tax on Bitcoin Trading

It is unclear which cryptocurrencies will be affected as the bill allows for certain unspecified exceptions to promote the underlying cryptocurrency technology and its use.

“It’s time to get nervous, ” an anonymous spokesman for a major cryptocurrency exchange told the Economic Times of India.

The CEO of the Mumbai-based cryptocurrency exchange WazirX Nischal Shetty criticized the initiative. He said that “there is no private cryptocurrency,” and the bill aims to help RBI issue state-owned cryptocurrencies by banning so-called “private” cryptocurrencies, with a few exceptions.

“A large country like India should at least work on understanding the underlying terminology before submitting technology-related bills to parliament. This initiative seems hasty,” Shetty said.

He added that the bill may not be approved. Incorrect or hasty regulations will set India back ten years, Shetty said, and correct regulation will bring the country to the forefront of the technology. If the bill is passed, India will become the only major Asian country to ban private cryptocurrencies, rather than regulating them like corporate shares.

Read also: India Crypto Exchanges Seek Legal Status Clarifications From RBI

Recall that in 2018, RBI banned banks and financial institutions from providing services to firms working with cryptocurrencies. However, in March 2020, India ‘s Supreme Court overturned the RBI directive.

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