The government of India reportedly is planning to introduce a new law to ban cryptocurrencies trade. According to Bloomberg, the bill is expected to be discussed by the federal cabinet before it is placed in parliament for approval.
Among the people familiar with the development, the belief is that the federal government will encourage blockchain and continue exploring blockchain use to publicly store data for land records, pharmaceutical drugs supply chain, or records of educational certificates, but is not keen on cryptocurrency trading.
The Indian central bank previously banned cryptocurrency transactions in 2018. However, the decision was paused when cryptocurrency exchanges responded with a lawsuit in the Supreme Court in September 2019 and won respite in March 2020.
The win in court prompted an almost 300% surge in Bitcoin price and an increase of 450% in cryptocurrency trading in just two months since March. This could have revived the concerns as more Indians risk savings in the time when the economy has slowed down by the coronavirus pandemic.
If the bill gets approved, it would place India out of step with other Asian economies, namely Singapore, South Korea, Japan, etc., which have chosen to regulate cryptocurrency trades. Its close neighbor and rival China, banned initial coin offerings (ICO) and cryptocurrencies use in 2017, recently allowed Bitcoin trading as virtual property, not as fiat money.
A renewed trading ban is expected to affect more than 1.7 million Indians trading in digital assets. Also, several cryptocurrency exchanges such as WaziX and crypto startups setting up in India.
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