A senior Indian government official reported Reuters that the nation of India is ready to propose a law that bans cryptocurrencies. The project would be a major blow to the industry, as it would allegedly penalize anyone who owns, trades or mines digital assets, including bitcoin.
Three years ago, the Reserve Bank of India (RBI) tried to ban the cryptocurrency by inhibiting banks from doing business with companies in the sector. Although India’s supreme court overturned the ban in 2020, it now appears that a new ban, even stricter, will be proposed soon.
“The senior officer said Reuters, however, that the plan is to ban private crypto-assets while promoting blockchain – a secure database technology that is the backbone of virtual currencies, but also a system that, experts say, can revolutionize international transactions ” . Reuters reported.
This coincides with recent speculation that India is considering launching its own central bank digital currency (CBDC). This news suggests that the government understands the potential impact of digital currencies, but has not yet adopted private currencies, such as bitcoin.
Despite this regulatory confusion, India remains a potential focus for Bitcoin adoption. With a population of 1.3 billion people and a general lack of access to traditional banks, Bitcoin can represent the trigger for individual freedom and monetary access.
“In India, despite government threats to ban it, the volume of transactions is growing and 8 million investors now hold 100 billion rupees ($ 1.4 billion) in cryptographic investments, according to industry estimates,” reports Reuters.
In addition, according to data from Coindance, India maintained a consistent LocalBitcoins volume of 113,772,416 rupees (about US $ 1.5 million) for the week starting on March 3, 2021. The proposed ban, although portentous, appears to have no impact on the volume of transactions in the India, at least for now.
It should also be noted that it is not realistic for a government to “ban” decentralized technology like Bitcoin, which is free and open source software that can be accessed and leveraged without the approval of any third party. However, they can impose penalties that hinder Bitcoin’s easy access or use.
As Bitcoin adoption inevitably increases in India, so do the potential benefits to be gained by network participants. These benefits may well outweigh any advantages intended with the proposed ban.