India to Propose Cryptocurrency Ban, Penalizing Miners and Traders

India will propose a law banning cryptocurrencies in almost all forms, including trading, holding, and mining.

March 15, 2021 | AtoZ Markets India, Asia’s second-most populous nation, will consider a bill banning cryptocurrency transactions and introducing criminal and administrative liability for miners and traders, according to Reuters, citing an unnamed senior government official.

The document instructs citizens to eliminate cryptocurrencies within six months. After this period, the owners are offered to levy fines. In the future, prison terms are provided for the possession, release, production, trading and transfer of cryptoassets.

Related: India Plans to Ban Private Cryptocurrencies Like Bitcoin

The authorities plan to ban cryptocurrencies without hindering the development of the blockchain, the official said.

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“The use of the technology itself will not cause harm, but the government will impose penalties for those who do not liquidate cryptoassets within the grace period established by law,” he explained.

The official refused to disclose the amount of the fines and the terms of imprisonment. According to him, the discussion of the document is at the final stage.

According to industry estimates, 8 million investors in India currently own digital assets totaling Rs 100 billion ($1.4 billion). There are no official data.

Recall that in 2019, a working group under the Government of India concluded that there is "no value at all" at the heart of cryptocurrencies. The authorities were advised to ban all digital assets , except for tokens issued by the central bank. At the same time, the government commission proposed to introduce fines of up to $330,000 and prison sentences of up to 10 years for miners and traders.

According to a number of media outlets, a document banning cryptocurrency trading was submitted to the Council of Ministers of India in September 2020.

Read also: 'We Plan To Regulate, Not Ban Cryptocurrencies" Indian Finance Minister

In February 2021, Bloomberg, citing an anonymous senior Finance Ministry official, said that if the ban were introduced, asset holders would have three to six months to close positions. At the end of the transition period, the investment will be liquidated.

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