The Indian digital currency industry has been going through a rollercoaster of emotions in recent months. First, the government proposed a bill that would ban digital currencies, only for the Finance Minister to refute the claims a few days ago. And now, in the latest twist, a senior government official has revealed a plan to ban digital currencies is already in progress.
India’s government will propose to ban Bitcoin and all other digital currencies, the unnamed official told Reuters. Those found to hold digital assets will face stiff fines, according to the official who wished to remain anonymous as the contents of the bill are not yet public.
The bill will be one of the strictest in the world, the official further revealed. It will make it illegal to possess, issue, mine, trade or transfer digital currencies. The government is confident that the bill will sail through parliament as Prime Minister Narendra Modi’s government holds an overwhelming majority of parliamentary seats.
Once it is passed by parliament, the bill will give residents in the country a six-month grace period to liquidate all their digital currencies. After this, the government will begin to penalize those who violate the law. The official declined to reveal whether the government will impose jail terms or just the fines.
The proposed ban will not be the first time the government has tried to stamp out digital currencies from the world’s second-most populous nation. While previous efforts have failed so far, the government seems to have accelerated its efforts this year.
As the Times of India reports, the Reserve Bank of India is also seeking to ban digital currencies. In its latest effort, it has urged the government to issue the ban as only a sovereign state can issue a currency. It further cited money laundering and terrorist financing risks which it believes digital currencies amplify.
As it has done so many times in the past, the central bank made it clear that it fully supports blockchain technology. The Indian government also exempts blockchain technology in its latest efforts to ban digital currencies.
“We don’t have a problem with technology. There’s no harm in harnessing the technology,” the government source told Reuters.
The hostile stance by the Indian government contradicts the Finance Minister who recently claimed India is keeping an open mind on digital currencies. As CoinGeek reported barely a week ago, Nirmala Sitharaman claimed her ministry was working with RBI to find a compromise.
Indian traders will keep on trading digital currencies as they have been doing as they await the possible ban, many have stated. Naimish Sanghvi, one of the traders, told Reuters, “If the ban is official we have to comply. Until then, I’d rather stack up and run with the market than panic and sell.”
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