An anonymous source claiming to be a senior Indian Finance Ministry official has claimed that the use of crypto assets will soon be completely banned in the world’s second most populated country.
Speaking to Bloomberg, the source claimed that the use of cryptocurrency in all its forms will be banned under a new law expected to soon be introduced in the parliament. Transacting with crypto via foreign exchanges will also be prohibited.
Crypto investors are expected to be given a three-to-six month transition period to liquidate their holdings after the new law comes into effect, the source said.
The official emphasized that crypto assets have been targeted by India’s lawmakers due to their lack of backing from the Reserve Bank of India, or RBI.
In January, India’s parliament introduced 'The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021' for discussion during the ongoing parliamentary sessions on the country’s budget.
The Bill’s purpose was described as creating a facilitative framework for a central bank digital currency issued by the RBI, and to “prohibit all private cryptocurrencies in India.”
Sathvik Vishwanath, the co-founder and CEO of major Indian cryptocurrency exchange Unocoin, told Bloomberg the local crypto industry are anxiously “waiting for details to come out to determine [their] next course of action:”
“If government goes ahead with banning all cryptocurrencies, except the one backed by the state, it will not make sense to continue our business in India. But we’ll have to wait and watch.”
In March 2020, India’s Supreme Court overturned the RBI’s April 2018 blanket ban on local banks providing services to businesses dealing with crypto, effectively legitimizing cryptocurrency companies across the country.
However, the Indian Ministry of Finance proposed legislation that would again ban crypto assets nation-wide in June 2020.