BitCoin Photograph:( AFP )
The ban won’t be enforced overnight and cryptocurrency investors will be given a transition period of three-to-six months after the implementation of the new law to liquidate their investments.
India will go ahead with a complete ban on investment in cryptocurrencies, while providing existing investors a transition period to exit their holdings.
Cryptocurrency isn’t fiat currency backed by the Reserve Bank of India and its usage in all forms will be banned through the new law that will be introduced in Parliament.
This would include a ban on transacting directly via foreign exchanges.
Seven million investors hold cryptocurrencies in India worth more than one billion dollars. The ban won’t be enforced overnight and cryptocurrency investors will be given a transition period of three-to-six months after the implementation of the new law to liquidate their investments. The proposed ban --- is part of a comprehensive bill on crypto and digital currencies. It may be introduced in the ongoing budget session of parliament.
Does this mean the end of the road for cryptocurrencies in India?
Not really, the bill may include certain exceptions. They could allow the promotion of the underlying technology. Like block chain, the decentralized digital ledger.
That drives — all types of cryptocurrencies.
An exception like this could provide the legal framework for the reserve bank of India to launch its official digital currency. China has a similar regulatory regime. It effectively banned trading and usage of cryptocurrencies in 2017.
Crypto exchanges were shut down. Last year; Beijing began testing its own digital currency in four cities. India’s move to regulate digital cash comes at a time — when the world is increasingly adopting it.
MasterCard and Visa have opened their payments network for some cryptocurrencies.
Customers using these platforms can now pay or accept money through crypto. Recently, auto giant Tesla made a big bet on bitcoin.
The company bought more 1.5 billion dollars worth of bitcoin.
It also allowed customers to pay through bitcoin for its products. Cryptocurrencies are now part of the mainstream global financial system.
India cannot afford to ignore this shift but it needs a legal framework first.
(With inputs from agencies)