In what could turn out to be the end of cryptocurrency mining, trading and investing in India, the Banning of Cryptocurrency and Regulation of Official Digital Currency Bill now proposes tougher penalties for all Indian citizens who “mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies, directly or indirectly.”
Controversially but decisively stifling innovation, persons participating in above activities will have to contend with a 10 year jail term without bail. If the bill sails through, all Indian citizens in possession of cryptocurrencies will required by law dispose them within three months. This is so because the bill calls for the amendment of the Prevention of Money Laundering Act of 2002 where cryptocurrencies will be included as tools facilitating the vice.
The move intentionally criminalizes any form of investment or development of cryptocurrency in the second most populous country in the world. But what is most striking is that it coincides with plans of the country to launch its central banked digital coin, the Digital Rupee.
Digital Rupee Incoming
According to the previous reports by the Economic Times, the Digital Rupee will be a culmination of a deep research of digital assets where the tasked team will comb through reams of data, comparing the advantages, the demerits and how consequential it would be supposed it is launched successful. Although the RBI has their reservation on Bitcoin and other forms of private cryptocurrencies, Sudarshan Sen, the Executive Director of India’s central bank said:
“Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak, we are looking at that closely.”
Considering the controversy and debate stemming from the bill, analysts now say this move could be the first move as the country’s main regulator moves in ahead of the launch of the central banked cryptocurrency. The fact that the team led by Economic Affairs Secretary Subhash Chandra Garg reportedly spurred on by members of the Securities and Exchange Board of India (SEBI) and Central Board of Direct Taxes (CBDT) amongst other industry influencers, made mining or simply holding a cryptocurrency a punishable offence subject to a lengthy jail term without bail is no doubt an expression of contempt to cryptocurrencies.
If the bill sees light and consequently enforced, it could permanently change the crypto landscape and even encourage other economies with their reservation against cryptocurrencies to act or even formulate restrictive laws.
RBI Crashed Cryptocurrency Exchanges
After all, this won’t be the first time the RBI had decided to proliferation of cryptocurrencies in the country. Despite Ripple making inroads in India and offering their solutions to six of the largest banks in the country, the RBI literally starved out liquidity from crypto to fiat exchanges by barring banks from offering services to these cogs. The result was devastating because most closed shops and shifted to other countries with warmer laws towards cryptocurrencies and digital assets. While issuing out their instructions to banks, the RBI expressed their caution saying:
“Technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system. However, Virtual Currencies (VCs), also variously referred to as crypto currencies and crypto assets, raise concerns of consumer protection, market integrity and money laundering, among others.”