A senior government official told Reuters that India will propose a law banning cryptocurrencies, imposing fines on anyone in the country, or even holding such digital assets, which could potentially result in millions of investments in hot asset classes. Those who caused a blow. The official with direct knowledge of the plan said that the bill is one of the most stringent cryptocurrency policies in the world, and it will criminalize the possession, issuance, mining, trading and transfer of crypto assets.
This measure is in line with the government’s agenda in January, which calls for a ban on private virtual currencies (such as Bitcoin) and the establishment of a framework for an official digital currency. However, recent government comments have raised investors’ hopes that the authorities will relax in the booming market.
The official, who asked not to be named, said the bill will give cryptocurrency holders a liquidation period of up to six months, after which they will be fined.
Since the government of Prime Minister Narendra Modi has a majority in Parliament, officials are confident that the bill will be passed.
If the ban becomes law, India will become the first major economy to illegally hold cryptocurrency. Even China, which bans mining and trade, will not punish possession of property.
The Ministry of Finance did not immediately respond to an email seeking comment.
“Greedy” surpasses “emergency”
Bitcoin is the world’s largest cryptocurrency. It hit an all-time high of $60,000 on Saturday. Its value has almost doubled this year because of the support of well-known supporters such as Tesla CEO Elon Musk. With support, the acceptance of payment has increased.
According to industry estimates, in India, despite the government’s threats to impose a ban, the transaction volume is increasing, and there are currently 8 million investors holding 100 billion rupees ($1.4 billion) in cryptocurrency investments. There is no official data.
Cryptocurrency investor Sumnesh Salodkar said: “Money is increasing rapidly every month, and you don’t want to sit on the sidelines.” “Although the potential ban makes people panic, greed still drives these choices.
CEO Gaurav Dahake said that user registrations and inflows of local cryptocurrency exchange Bitbns have increased by 30 times compared to a year ago. Unocoin is one of the oldest exchanges in India, and despite concerns about the ban, it added 20,000 users in January and February.
Vikram Rangala, the chief marketing officer of the exchange, stated that ZebPay “has as much daily transaction volume in February 2021 as we did for the entire year of February 2020.”
Senior Indian officials called cryptocurrencies a “Ponzi scheme,” but this month Finance Minister Nirmala Sitharaman eased some investors’ concerns.
She told CNBC-TV18: “I can only give you a clue. We will not work behind closed doors. We are looking for ways to experiment in the digital world and cryptocurrency.” “It will take a very calibrated position.”
However, the senior official told Reuters that the plan is to ban private encrypted assets while promoting blockchain. Blockchain is a secure database technology, which is not only the foundation of virtual currency, but also a system that experts believe can completely change international transactions.
The official said: “We have no technical problems. There is no harm in using technology.” He added that the government’s actions will be “adjusted” according to the level of punishment for those who have not liquidated their cryptocurrency assets. The grace period of the law.
A government team recommended in 2019 that anyone who mines, produces, holds, sells, transfers, disposes, issues, or trades cryptocurrency should be sentenced to a maximum of 10 years in prison.
The official declined to disclose whether the new bill includes imprisonment clauses and fines, or provide more details, but said the discussion is still in the final stage.
In March 2020, the Supreme Court of India rejected an order of the Central Bank in 2018 prohibiting banks from conducting cryptocurrency transactions, prompting investors to flood the market. The court ordered the government to take a stand on the matter and draft a law.
The Reserve Bank of India once again expressed its concern last month, saying that what it said was the risk of cryptocurrency to financial stability. The official said that at the same time, the central bank has been working hard to launch its own digital currency, and the government’s bill will also encourage this move.
Although the market is booming, investors realize that prosperity may be in danger.
Naimish Sanghvi, who began betting on digital currencies last year, told Reuters that he said: “If this ban is official, we must abide by it.” Market competition, not panic and sell-off.”
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