A senior Indian government official has notified Reuters that the country of India wants to propose a law banning cryptocurrencies. The bill would be a major blow to the industry, as it would apparently punish anyone who owns, trades or exploits digital assets, including bitcoin.
Three years ago, the Reserve Bank of India (RBI) sought to ban cryptocurrency by preventing banks from doing business with companies in the industry. Although India’s Supreme Court has rejected the ban in 2020, it appears that a new, even stricter ban will be proposed soon.
‘The senior official said Reuters“However, the plan is to ban private crypto-assets while promoting blockchain – a secure database technology that is the backbone of virtual currencies, but also a system that experts say could revolutionize international transactions,” he said. Reuters report.
This coincides with recent speculation that India is considering releasing its own central bank’s digital currency (CBDC). This news indicates that the government understands the potential impact of digital currencies, but that it is not yet privately owned like bitcoin.
Despite this regulatory confusion, India remains a potential breeding ground for the adoption of Bitcoin. With a population of 1.3 billion people and a huge lack of access to traditional banking, Bitcoin could represent the release of individual freedom and monetary access.
“In India, despite the government’s threats of a ban, transaction volumes are swell and 8 million investors now hold 100 billion rupees ($ 1.4 billion) in crypto investments, according to industry estimates,” reports Reuters.
In addition, according to data from Coindance, India maintained a constant volume of LocalBitcoins at 113,772,416 rupees (approximately $ 1.5 million) for the week beginning March 3, 2021. The proposed ban, although unpredictable, does not appear to be in place for the transaction volume in India at present.
It should also be noted that it is not realistic for a government to ‘ban’ a decentralized technology such as Bitcoin, which is a free and open-source software that can be accessed and used without the approval of any third party. However, they can impose fines that make it difficult to access Bitcoin or use it easily.
As Bitcoin adoption inevitably increases in India, the potential benefits that network participants can take advantage of will also increase. These benefits may well outweigh any benefits sought by the proposed ban.