The Indian government will most likely pass a law that will ban all types of private cryptocurrencies and create a central bank-controlled institution for one for a CBDC. it was added to Parliament’s winter agenda, which will resume work on 29 November.
A government working group, in the last meeting chaired by Prime Minister Narendra Damodardas Modi, had agreed on the need for a law that guarantees a market closed to cryptocurrencies other than that of the central bank, controlled by the government, with the usual spurious reasons who see crypto markets in the smell of money laundering and terrorist financing.
Bitcoin could “spoil our young people” if it ends up “in the wrong hands,” Prime Minister Modi.
On that occasion, Shaktikanta Das (governor of the RBI, the Central Bank of India) had highlighted a growing concern for the challenges to macroeconomics and financial stability created by cryptocurrencies, which have met with growing success in the country, with about twenty million Indians who have invested in the new market.
The Indian Central Bank has announced since June that it has been working to introduce its own digital currency later this year, warning it has serious concerns about private cryptocurrencies such as Bitcoin, Ethereum and others (although we note that Bitcoin and Ethereum are not proven cryptocurrencies).
Many Bollywood actors and personalities have also already entered the collection of NFTs: superstar Amitabh Bachchan recently auctioned off his collection of NFTs. The Indian cryptocurrency market has exploded since the country’s Supreme Court overturned a previous ban in April last year, growing more than 600 percent in the past year according to research by Chainalysis. It is estimated that between 15 and 100 million people in Asia’s third largest economy own cryptocurrencies, with total holdings in the billions of dollars. Their investments will now face an uncertain future.
The bill, which will arrive before the new legislative session, will allow some exceptions to promote cryptocurrency technology, according to the parliament’s upcoming affairs bulletin, but no further details have been released on the proposed legislation.
With this move, India takes the same path as China, which banned cryptocurrency transactions last September. However, Bitcoin’s price does not appear to have been affected by this announcement.
