An anonymous source claiming to be a senior official of the Indian Ministry of Finance has claimed that the use of crypto assets will soon be completely banned in the world’s second most populous 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 come soon in Parliament. It will also be prohibited to deal with cryptocurrencies via foreign exchanges.
The source said cryptocurrency investors are expected to be given a transition period of three to six months to liquidate their holdings after the new law goes into effect.
The official asserted that the crypto assets have been targeted by lawmakers in India due to their lack of support from the Reserve Bank of India, or RBI.
In January, the Indian Parliament presented the “Cryptocurrency and Organization of the Official Digital Currency Act, 2021” for discussion during the ongoing parliamentary sessions on the country’s budget.
The purpose of the bill was described as creating an facilitative framework for a central bank digital currency issued by the Reserve Bank of India, and “banning all private cryptocurrencies in India”.
Sathvik Vishwanath, co-founder and CEO of the major Indian cryptocurrency exchange Unocoin, told Bloomberg that the local cryptocurrency industry is anxiously waiting for details to emerge to determine [their] Next work path:
“If the government goes ahead with banning all cryptocurrencies, except for those that are backed by the state, it wouldn’t make sense to continue our business in India. But we have to wait and watch.”
In March 2020, the Supreme Court of India overturned the blanket ban that the Reserve Bank of India imposed in April 2018 on local banks providing services to companies dealing with cryptocurrencies, effectively legitimizing cryptocurrency companies across the country.
However, India’s Ministry of Finance proposed legislation to again ban crypto assets nationwide in June 2020.