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India Plans to Criminalise Owning Bitcoin
By Shane Addinall Mar 23, 2021 IndustryThe Indian government is planning an outright cryptocurrency ban. This proves to be one of the strictest proposed sanctions on digital currency in the world. Read on to learn more about the possible fallout such a move could bring.Cryptocurrency is the craze in financial circles right now. Bitcoin has gone bounding over the $60,000 price barrier and digital assets/non-fungible tokens have harnessed the headlines, as the sale of art and sports memorabilia have gone through the roof thanks to blockchain technology.
The public is slowly building growing confidence in the virtual asset economy, which is the fuel behind the boom right now. Unfortunately, the Indian government does not share the same enthusiasm for the state of the blockchain world and is looking to push through a bill that would make cryptocurrency illegal in the country.
Punters are confident of passing the bill, as the party pushing the amendment holds the seat majority in parliament. Should it be passed, it will be one of the strictest policies on cryptocurrency in the world.
Results of the Pending Legislation
Should the Indian government succeed in passing the new proposed laws on crypto, the country could move to block Bitcoin exchange IP addresses. This would include anyone found trading, mining, holding, or brokering virtual currency within the borders of India and they will receive heavy fines.
India would be the first country to penalise possession of crypto. Even strict countries such as China, which bans the mining and trading of crypto, do not penalise the possession of virtual currency.
A change in legislation would deal a big blow to investors in the country. An estimated eight million Indian investors currently hold around $1.4 billion in virtual currency. Each will receive a 6-month grace period to liquidate their assets and close their crypto wallets.
Despite the unwelcome news in the digital sector, the Indian market is thriving with the current ‘Bitcoin Boom’. The currency’s price has already doubled in value in the last 12 months. One investor said:
“The money is multiplying rapidly every month and you don’t want to be sitting on the sidelines. Even though people are panicking due to the potential ban, greed is driving these choices.”
Evidently, greed is one of the fuelling factors behind the bill. Combined with a lack of regulation and the high volatility of the market, experts in the country believe that this may be a recipe for financial disaster in the long run.
Throwing the Baby Out with The Bathwater
Cryptocurrency and blockchain are proving to be a big part of the future. Any country looking to ban the industry is inadvertently resisting technological advancement. While there is a very real risk involved in cryptocurrency investments, all investments and stock trades are risky. Some more than others.
A fine balance needs to be trodden by India. Depriving adults of certain freedoms is simply not conducive to growth. Instead, the Indian government could look to other progressive ways to address their concerns, including:
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Implementing a national awareness campaign for cryptocurrencies, whereby the public receives education about the blockchain. Here, the campaign can warn against foolish trades and encourage wise investments.
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Implementing and enforcing a ban on false advertising about Bitcoin and other cryptocurrencies. Currently, many people are duped to invest because of false promises and misleading information.
- Implementing regulatory measures on the crypto market in India; establishing a good, lawful guideline for trade. Imposing certain limits and restrictions could prove helpful.
In February 2021, crypto exchanges in India launched the #IndiaWantsBitcoin campaign in an attempt to convince the government to look for alternative options rather than implementing an outright ban on the blockchain world. Nischal Shetty, the CEO of WarzirX exchange (owned by Binance) said:
“Within one day, over 10,000 emails have been sent via indiawantscrypto.net from all parts of the country. It’s a critical moment, and all eyes are on India to find out if we’re for or against innovation.”
There are concerns that a potential ban may damage the country’s economy and adversely affect the crypto markets considerably. Certain groups are also afraid that such a decision might stunt India’s digital growth going forward, a fate that the world’s second-most populous country could ill afford.
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Implementing a national awareness campaign for cryptocurrencies, whereby the public receives education about the blockchain. Here, the campaign can warn against foolish trades and encourage wise investments.