India is planning to go ahead with a complete ban on cryptocurrency investments, according to a report published by Bloomberg. The government is also planning to give crypto holders a transition period of three-to-six months to exit their holdings.
A senior official from the Indian Ministry of Finance told Bloomberg that the authorities are in favor of a digital currency issued by the Reserve Bank of India (RBI) but not private cryptocurrencies. Additionally, the anonymous source mentioned that the ban will be applicable to cryptocurrency transactions through digital exchanges.
The country has recently introduced a cryptocurrency bill to introduce a framework for the creation of government-backed digital currency. Moreover, the bill proposed a ban on the transactions of private digital assets.
The recent report increased uncertainty among the Indian crypto community. “If you really care about Crypto then work towards helping to bring positive crypto regulations in India. Flag of India First objective is to ensure crypto is not banned in India. All your other complaints can be solved later. As an industry, let’s focus on regulation first,” Nischal Shetty, CEO of WazirX mentioned on Twitter.
Growing Demand for Cryptocurrency Assets
India is an emerging economy and the country has seen a significant rise in demand for cryptocurrency trading in 2020. Digital exchanges in India reported growing volumes due to substantial retail demand. Cryptocurrency adoption has also increased in recent times as the world’s first crypto bank opened in India in December 2020. Despite the growing adoption, the Indian crypto community is still uncertain about the future of digital assets in the country amid a lack of regulation.
“Crypto provides Indians an opportunity to participate in global innovation. We have a talented young population that can participate & win. Time to make sure your leaders understand the importance of Crypto to you,” Nischal said.
Finance Magnates earlier reported about how India is exploring possibilities for the launch of a central bank digital currency (CBDC).