India Continues Hostility to Crypto with New Legislation

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Earlier, India’s prime minister Narendra Modi said that cryptocurrencies are dangerous and could spoil the youths in the country.

Most countries in the world continue to embrace cryptocurrency considering its economic potential and due to the continued growth of the space. While some see potentials as the factor for allowing it, some other countries like India fr example have indicated readiness to ban crypto assets. However, it has hinted that it would be launching a Central Bank Digital Currency (CBDC) project instead. 

This surfaced in the newly proposed legislation “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” which expressly indicated that the country would prohibit all private cryptocurrencies. The bill revealed that it would only give exceptions to crypto assets that would promote the underlying tech and its uses.

As stated in the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India is not only barring crypto assets but also working to design a perfect framework for the country’s digital currency that the apex bank in Indian, the Reserve Bank of India will launch by next month.

The news has triggered a massive sell-off in India’s crypto markets, with even the Dollar-linked stablecoin, Tether, on Wednesday plunging by 25% to around 60 Rupees in response to the move by the authorities. The flagship crypto-asset, Bitcoin, also lost 2.7% of its gain in the global market.

This could be a bit of the effect that is still to come, as available information from the industry suggests that there are 15 million to 20 million crypto investors in the country, whose total holdings are worth approximately $400 billion rupees (an equivalent of $5.39 billion).

The head of investment analysis at investment platform AJ Bell, Laith Khalaf, likened the move to Chinese action which still could not stop the growth of Bitcoin. “India’s plan to ban cryptocurrencies has not wrought the same damage on the bitcoin price as China’s summer crackdown, but it nonetheless marks yet another stumbling block in crypto’s advancement as an economic force in the real world,” said he.

Globally, cryptocurrency is a talking point within international communities that continue to see some dangers in the asset class. Back in September, El Salvador became the first country in the world to adopt Bitcoin as legal tender

However, before the adoption and even most recently, the International Monetary Fund has issued several warnings to the Central American country about the possible risks that may accompany the adoption.

It is worth noting that just recently, India’s prime minister, Narendra Modi commented that cryptocurrencies are dangerous and could spoil the youths in the country. Previously, the Asian country had criminalized the possession, issuance, mining, trading, and transference of crypto assets.

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Oluwapelumi Adejumo

Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.