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Crypto traders and investors as well as companies are expected to be given a three to six month transition period to liquidate their digital holdings after the new law is made officially.
According to reports, India is set to issue a crypto ban in the country as a draft bill is likely to be passed. A senior Finance Ministry official who wanted to remain anonymous told reporters that the legislative proposal, ”The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,” won’t be imposed overnight and is yet to be formally released but it contains plans to ban all “private cryptocurrencies” in India.
The “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” will only allow for a national digital currency to be used, thus if the country creates one, an idea that has been speculative. The bill is also listed for introduction in the ongoing Budget session of Parliament, which ends on April 8, with a recess between February 15 and March 8.
The Senior Finance Ministry official speaking to Bloomberg stated that the crypto ban in India would restrict crypto trading through foreign exchanges, via a law that will be introduced in parliament. The ban will also halt all crypto usage in all forms since India’s central bank does not support cryptocurrencies.
The official also revealed that India’s crypto law will be formed based on China’s crypto policies, which has effectively banned crypto trading. China, however, allows crypto to crypto trading as its ban was only on fiat to crypto trading.
Crypto traders and investors as well as companies are expected to be given a three to six-month transition period to liquidate their digital holdings after the new law is made officially.
A subsequent and separate report from Bloomberg stated that, the incoming bill will have some exceptions which will include “ promotion of the underlying technology of cryptocurrencies and its uses.” This exception however appears to be referencing blockchain technology and not cryptocurrencies themselves.
The definition of “private cryptocurrencies” wasn’t provided in the bill, as well as the final text even though Nirmala Sitharaman, India’s finance Minister suggested earlier this week that private cryptocurrencies include all digital currencies apart from those issued by a central bank.
India’s relationship with Bitcoin and cryptocurrency as a whole hasn’t been an ideal one and this is largely due to the lack of backing from the Reserve Bank of India (RBI). The central bank of India effectively banned banks from working with crypto firms in April 2018, leading to many exchanges shutting down.
India’s imminent crypto ban came to light when India’s parliament introduced “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” for discussion during the ongoing parliamentary sessions on the country’s budget in January.
The proposed bill “will be soon sent to the Union Cabinet for approval,” according to the anonymous official.