- Indian Govt.’s new crypto bill could make a huge Impact
- Violation of the law would be held without bail and arrested without warrants
- Huge increase in Indian investors in crypto assets due to aggressive advertising
India’s proposed legislation would prohibit the use of cryptocurrencies as a payment method, and those who violate the law would be held without bail and arrested without warrants, Reuters reported, citing sources.
In the past, Indian Prime Minister Narendra Modi’s government has hinted that it plans to prohibit most cryptocurrencies – a move that follows measures taken by China last month that intensified its crackdown on them.
An overview of the bill outlines a general prohibition of all individual activities involving the mining, generating, holding, or selling of digital currencies for the purpose of “storage of value, medium of exchange, or unit of account.”
It also said that violating any of these rules would be “cognizable.” This means that arrest could be made without a warrant, and bail would not be available.
There were several sources with direct knowledge of the matter, but none could be identified, and weren’t authorized to speak to the media regarding the matter. Emails sent to the finance ministry for comment went unanswered.
Though the government has stated it wants to promote blockchain technologies, the proposed law is threatening their use as well as the non-fungible token market in India, attorneys said.
Anirudh Rastogi, a founder of law firm Ikigai Law, noted that if no payments are allowed and a transaction fee exception is not made, it effectively stops the development of blockchains and the NFT.
Several investors suffered significant losses after exiting the market following the government’s plans to crack down on cryptocurrency trading. India has seen an increase in investors in crypto assets due to aggressive advertising and high prices for cryptocurrencies.
There are no official statistics available, but industry estimates suggest that some 15 million to 20 million Indians are investing in cryptocurrencies, with a total value of Rs 450 billion ($6 billion).
Sources and the draft summary of the bill state the government will also crack down heavily on advertisements that attempt to lure new investors. According to the source, people will likely be barred from using self-custodial wallets that store digital currencies outside of exchanges.
A draft summary of the proposed bill notes that the new regulations were conceived because of the central bank’s deep concern over digital currencies, with safeguards being put in place to protect the traditional financial sector from cryptocurrencies.
The Securities and Exchange Board of India (SEBI) will regulate crypto assets per the draft summary