Cryptocurrency might return to the courtroom in India very soon. According to news published by Bloomberg.com, India plans to introduce a new crypto law. This law might ban the trading of digital assets like Bitcoin in the country. Most of the Asian economies have already embraced regulated cryptocurrency trading but India does not seem to be following suit.
According to two unidentified spokespeople, the cryptocurrency trading ban bill might soon be discussed by the federal cabinet. Post-discussion, the bill will be presented in the Indian parliament to pass the law. However, the sources confirmed that the federal cabinet has nothing against the underlying technology – blockchain.
As a matter of fact, NITI Aayog, the policy think tank of the government of India, is already exploring possible use cases of blockchain. Earlier this year, NITI Aayog, headed by Prime Minister Narendra Modi, published a paper on India’s blockchain strategy. According to the paper, India will be using blockchain for ease of Business, ease of Living, and ease of Governance.
Furthermore, in the same paper, NITI Aayog mentioned that government must pay special attention to peer-to-peer transaction networks as they can help create more socio-economic value.
Cryptocurrency trading ban- A harsh step?
More than 1.7 million Indian cryptocurrency traders trade in digital assets in India. The number jumped up significantly after the RBI trading ban was overturned by the Supreme Court in March 2020. According to the latest survey conducted by Bit2buzz, almost 75% of the Indian population between the age of 18-35 holds cryptocurrency. This is quite a significant amount.
Between March and May 2020, cryptocurrency trading in India witnessed a 450% surge. However, the federal cabinet is concerned about the number of crypto frauds that have also multiplied since then. As this is a burning issue, the cabinet is discussing a bill to ban cryptocurrency trading.
Boom or doom
According to a recent report by Coinpaprika and OKEx, India’s market share in Bitcoin and other cryptocurrencies might explode between 2020-2022. However, if the Indian Parliament passes the trading ban bill, the future of cryptocurrency might not be able to escape the doom.
With the lifting of the RBI trading ban, many startups mushroomed in India, and the country attracted many foreign investors. Thus, the startups and foreign investors, in addition to the traders, will also have to face the heat.
India’s decision will have a wider impact across Asian countries too. Being one of the strongest economies of Asia, the ban could lead to a ripple effect and other Asian nations may follow the suit.
Many subject matter experts suggest that India needs to regulate cryptocurrency trading rather than banning it altogether.
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