The Indian government intends to propose a law prohibiting the trade or holding of cryptocurrencies, in which anyone involved in the trading or holding of such assets may be fined, Reuters reported, citing unnamed government sources.
A cryptocurrency is a digital currency that can be used to buy products and services, and it is secured by an online ledger and strong cryptography.
The government had proposed banning private virtual currencies such as Bitcoin and Ethereum in January 2021. The proposed legislation is supposed to allow cryptocurrency owners up to six months to liquidate their properties before facing penalties.
According to Reuters, the new legislation will be the toughest in the world, essentially outlawing cryptocurrency ownership, issuance, mining, and trading.
In India, there is no official data on the number of cryptocurrency investors or the value of their holdings.
India will be the first major economy to criminalize crypto investors if the bill passes, which officials believe it would because Prime Minister Narendra Modi has a majority in parliament. China has prohibited cryptocurrency mining and trading but does not enforce penalties for possession.
In India, the confusion around cryptocurrencies, including popular ones like Bitcoin, has grown in recent years. The aim of the national govt is to discourage private virtual currencies while establishing a basis for an official digital currency.
Last month, the Reserve Bank of India expressed its concern once more, citing cryptocurrencies as a threat to financial stability.
However, a senior official told Reuters that the aim is to ban private crypto-assets while promoting blockchain, a secure ledger technology that serves as the foundation for virtual currencies as well as a mechanism that analysts believe has the potential to revolutionize foreign transactions.