In a shocking plot twist, India will ban all private cryptocurrencies bar a select few in a bill seeking to regulate digital currencies announced by parliament.
The Indian government will allow a limited number of cryptos to promote their underlying technology and uses, and the country is set to launch its own digital currency in December following “serious concerns” regarding private cryptos.
An estimated 15 to 20 million Indian crypto investors will be affected after the government announced it was looking to ban most private cryptos, except those it will allow according to a legislative agenda. Bitcoin and Ethereum are among the digital assets set to be banned as legislative bodies cite “serious concerns” surrounding cryptos in general.
‘Financial Terrorism’ a Symptom of Unregulated Cryptos
Indian Prime Minister Narendra Modi has said countries should work together to ensure the safety of cryptos so they do not “end up in the wrong hands”. Modi has also claimed that the unregulated nature of digital assets makes them prone to money laundering and financial terrorism.
Through the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India looks to restrict the domestic marketing and advertising of cryptos. In a country where many well-to-do citizens have traditionally turned to gold as an investment, the new ban will see some 15 to 20 million investors no longer able to go the crypto route as an alternative.
One Indian crypto user took to Reddit to express his dismay at the situation in detail:
Like many others, the country has fallen on difficult times during the Covid-19 pandemic and is struggling in its fight against the virus. Australian cricketers Pat Cummins and Brett Lee have stepped in to help, each donating a generous amount of money. Lee turned to cryptos to fund his donation, giving one bitcoin to Crypto Relief, which went towards boosting the oxygen supply for Covid patients on the subcontinent.
India to Pilot CBDC in 2022
The Reserve Bank of India (RBI) is looking at the feasibility of a Central Bank Digital Currency (CBDC) and may launch one in the upcoming fiscal year. The CBDC is a digital derivative of a legal tender issued by a nation’s central bank.
Yet many are raising concerns regarding India trying to make its own digital currency that will be held by the reserve. Arguments are being put forward such a currency will defeat the entire purpose of cryptos.
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