Bitcoin and a number of other cryptocurrencies are currently surging at their highest. However, the Indian government seems to be once again trying to ban crypto trading in the country. The government during the Budget 2021 revealed its plan to propose a new bill, which is intended to ban digital money in the country and also fine anyone trading or holding any crypto assets. Also Read - Buy a Electric Tesla car using Bitcoin in the future: Elon Musk
According to a report by Reuters, the new bill is looking to criminalise possession, issuance, mining, trading and transferring any crypto assets in the country. If the bill is passed, it will make India the first major economy to make holding cryptocurrency illegal. Countries like China have banned mining and trading crypto, but do not penalise their possession. Also Read - Bitcoin Explained: What is it, trading legalities in India and more
Quoting a government official, the report states that the Indian government will provide investors with a six-month window, allowing them to liquidate their assets before the penalty is levied. According to expected numbers, over 7 million Indians have around $1 billion invested in crypto assets. Also Read - Elon Musk says Bitcoin is "on the verge" of being more widely accepted
Take note that there is no way to know the actual amount of crypto assets held by Indians as there is no actual way to trace crypto assets based on the blockchain technology.
The report suggests, the government plans to ban private crypto-assets while promoting blockchain. This hints that the government could introduce its own regularised cryptocurrency. However, the lustre behind cryptocurrency is the fact that nobody is monitoring it and people transacting in it can stay anonymous, keeping their privacy intact. This also causes a lot of ill elements to use the currency for illegal things.
The bill has not been enacted as of now and is yet to be proposed, which means that you can keep on trading cryptocurrencies like normal for now.
What happened in the past?
Back in 2018, the Reserve Bank of India banned all crypto transactions in the country, while at the same time alerting all banks to stop dealing with private cryptocurrencies. This led to a halt in cryptocurrency trading in the country. In 2020, the Indian Supreme Court ordered a reversal of the ban on the grounds of disproportionality.