India announces bill to ban cryptocurrencies | MCU Times

India announces bill to ban cryptocurrencies

- AFP / fil
– AFP / fil
  • The Government of India will introduce bills to ban private cryptocurrencies and create a framework for a central bank-backed digital money.
  • Between 15-100 million people in Asia’s third largest economy are estimated to own cryptocurrencies.
  • India’s central bank announced in June that it is working to introduce its own digital currency before the end of the year.

MUMBAI: The Indian government will introduce a bill to ban private cryptocurrencies and create a framework for a central bank-backed digital money, parliament said in a shock statement late Tuesday.

The proposed bill “seeks to ban all private cryptocurrencies in India”, said Lok Sabha, coming after Prime Minister Narendra Modi last week warned that Bitcoin poses a risk to younger generations and could “spoil our youth” if it ends “in the wrong hands”.

It is the latest move of a major growth economy, after China declared all cryptocurrency transactions illegal in September.

India’s crypto market has been booming since the country’s Supreme Court overturned a previous ban in April last year, growing more than 600% over the past year, according to research from Chainalysis.

Between 15 and 100 million people in Asia’s third largest economy are estimated to own cryptocurrencies with a total holdings of billions of dollars.

Their investments are now facing an uncertain future.

India’s central bank announced in June that it is working to introduce its own digital currency before the end of the year, while warning that it has “serious concerns” over private cryptocurrencies such as Bitcoin, Ethereum and others.

The bill, which comes before the new legislative assembly, will allow for some exceptions to promote cryptocurrency technology, according to Parliament’s bulletin of forthcoming business, but no further details on the proposed legislation were released.

The market price of Bitcoin seemed unaffected and rose 1.67% in Tuesday’s trading.

But the wording of the proposed bill caused alarm bells to ring among local shoppers and enthusiasts.

“The wording has created panic,” said Kashif Raza, founder of the crypto-education platform Bitinning, adding that the industry expected the government to take a more favorable stance after recent consultations with the industry.

“Of course there will be a shutdown of the industry,” he added. “Industry will die in its natural way. Intellectual capital will move away, investors will face losses.”

Under the microscope

Cryptocurrencies have been under the control of Indian regulators since they first entered the local market in 2013.

An increase in fraudulent cryptocurrencies following the Modi government’s demonetization of almost all banknotes in 2016 led to the country’s central bank banning cryptocurrencies in April 2018.

The Supreme Court lifted the ban two years later, and investment has increased in the time since.

Indians have been bombarded in recent months with advertisements for CoinSwitchKuber, CoinDCX and other home-grown crypto exchanges across TV channels, online streaming services and social media.

These platforms spent more than 500 million rupees ($ 6.7 million) on commercials during the recently concluded T20 World Cup, according to surveys by TAM Sports, where viewers were exposed to an average of 51 cryptocurrency commercials per year. match.

Analysts say regulation will be central to managing security risks, with crypto exchanges increasingly targeted by cybercriminals as virtual currency prices rise.

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