Bitcoin, Ethereum and dogecoin prices crash in India amid fears of crypto ban

Through the bill, India is planning to develop framework for digital currency to be issued by its central bank

Vishwam Sankaran
Wednesday 24 November 2021 08:54
Comments

India to Introduce Bill Banning Private Cryptocurrencies With ‘Certain Exceptions’

Cryptocurrency prices have plunged sharply in India’s domestic exchanges following reports that the government is planning to introduce a bill in the upcoming winter session of Parliament that would ban most private cryptocurrencies.

The prices of several leading cryptocurrencies, including bitcoin, ethereum, and dogecoin nosedived by about 15 per cent to 20 per cent in Indian rupee terms on Wednesday.

Under the draft Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, mining, holding, selling, issuing, transferring or use of cryptocurrency in India is punishable with a fine or imprisonment of up to 10 years, or both.

The draft bill, introduced on Tuesday, permits the use of processes or technology underlying any cryptocurrency for experiment, research, or teaching. India is also looking to develop a framework for the country’s official digital currency, which will be issued by its central bank through this bill.

The draft bill acknowledges that the virtual tokens have benefits such as better record-keeping, and more efficient cross-border payments, but it also raises concerns over the potential use of cryptocurrencies for money-laundering, risks to consumers and threat to the country’s financial stability.

Currently, there are no regulations in India on the use of cryptocurrencies. With the new bill, the government considers banning “all private cryptocurrencies”, albeit with some exceptions that have not been made clear.

Following reports that the bill would be introduced in the next parliament session that is scheduled from 29 November, domestic cryptocurrency trading app WazirX witnessed heavy user activity, leading to its crash late on Tuesday.

Several WazirX users, attempting to sell their investments, complained that they were unable to buy or sell cryptocurrencies on the platform.

WazirX chief Nischal Shetty requested investors to not panic and show faith in cryptocurrencies.

“This is not the end but the beginning of crypto regulations in India. Industry has had the opportunity to present. Law makers understand the growing market,” Mr Shetty said.

“Over 15M+ people own crypto in India. There are ways to curb the bad activities and promote innovation,” he added.

The domestic market crash has, however, not affected the global crypto market, with bitcoin continuing to trade close to the $57,000 mark.

Though a bill had not been introduced to regulate cryptocurrencies in India until now, the government has convened several discussions with investors and stakeholders throughout the year, showing signs that it may have changed its stance since the time the bill was drafted.

Since these deliberations, sources close to the government have also indicated that the government is looking to regulate cryptocurrencies by discouraging trading in cryptocurrencies by imposing hefty taxes rather than outright bans on the virtual tokens.

Prime minister Narendra Modi also chaired a high-level meeting recently on the usage of cryptocurrencies, with government sources asserting that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in