The Indian government is said to be totally banning investment in cryptocurrencies.
BloombergQuint reported the news on Thursday, citing an unidentified “senior Ministry of Finance official”. The ban will not be imposed overnight, according to the official, who said the government would give a transition period of three to six months for existing investors to settle their investments.
As India’s central bank does not support cryptocurrencies, the government will ban their use in all forms through a law that will be introduced in parliament, the official said. The ban would also restrict crypto commerce through foreign exchanges, according to the report.
India’s crypto law will be based on China’s crypto regime, which effectively banned crypto commerce, according to the official. China, however, has only banned fiat trade for cryptography since 2017. Trade in cryptography for cryptography is still allowed in the country.
India’s proposal “Cryptocurrency and Regulation of the Official Digital Currency Act 2021” is listed for introduction to Parliament’s ongoing budget session, which ends on April 8, with a recess between February 15 and March 8.
The bill aims to ban all “private cryptocurrencies” in India. The definition of private cryptocurrencies and the final text of the bill are not yet known. Still, India’s finance minister, Nirmala Sitharaman, earlier this week, suggested that private cryptocurrencies include all digital currencies except those issued by a central bank.
According to the official cited above, the proposed bill “will soon be sent to the Union Council of Ministers for approval”.
Earlier this week, India’s junior finance minister, Anurag Thakur, also said that the project “is being finalized and will be sent to the cabinet soon”.
As The Block previously reported, the legislative process is slow in India. Once a bill is referred to the cabinet for consultation, it goes through various ministries to obtain feedback. As soon as the process is completed, the bill will be forwarded to Parliament. Parliament has its own approval processes, including the approval of Lok Sabha (House of the People) and Rajya Sabha (Council of States). After the bill is passed in Parliament, it goes to the President of India for a final signature.
However, if the cabinet wants a specific project to be approved, it can follow the ordination path. The ordinances allow the Indian government to take immediate legislative action. Last week, there were reports that the government is likely to pass a cryptocurrency bill through a decree.
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