Business - Economy
Updated: March 15, 2021

Bitcoin's Rally Slumps As India Proposes Crypto Ban

By Oluwatosin Ogunjuyigbe
March 15, 2021
0

India, the world's second-most populous nation is planning to clamp down on anyone trading or holding digital assets such as Bitcoin, causing concern to investors on Monday.

According to a report by Reuters on Monday, trading, mining, issuance, and possession of cryptocurrencies are expected to be criminalized in India with an upcoming legislative bill. This is one of the strictest policies against cryptocurrencies so far.

Bitcoin reached a new high of almost $62,000 on Saturday, before slipping to $57,885 on Monday, in the aftermath of the news that India is preparing to propose a cryptocurrency ban.

The measure is in line with a January government agenda that called for banning private virtual currencies such as bitcoin while building a framework for an official digital currency. But recent government comments had raised investors’ hopes that the authorities might go easier on the booming market.

Instead, the bill would give holders of cryptocurrencies up to six months to liquidate, after which penalties will be levied, said the official, who asked not to be named as the contents of the bill are not public.

The official, who was not named, said the legislation is likely to make it through Prime Minister Narendra Modi’s majority-controlled parliament.

If the ban becomes law, India would be the first major economy to make holding cryptocurrency illegal.Although China has banned mining and trading, possession is not penalised.

Minister of State for Finance Anurag Thakur said on March 6 that the government was looking into national security risks posed by cryptocurrencies ahead of a decision to ban them.

However, in India, despite government threats of a ban, transaction volumes are swelling and 8 million investors now hold 100 billion rupees ($1.4 billion) in crypto-investments, according to industry estimates. No official data is available.

“The money is multiplying rapidly every month and you don’t want to be sitting on the sidelines,” said Sumnesh Salodkar, a crypto-investor. “Even though people are panicking due to the potential ban, greed is driving these choices.”