India will introduce a law banning cryptocurrencies, fining anyone trading in the nation, or even holding before-mentioned digital assets. A senior government official informed a potential blow to millions of investors stacking into the red-hot asset class.

The bill, one of the world’s most stringent policies against cryptocurrencies, would criminalize ownership, issuance, mining, trading, and assigning crypto-assets, said the official, who has a direct understanding of the plan.

The proposition is in line with a January government plan that called for banning private virtual money such as bitcoin while building a skeleton for an official digital currency. But recent government comments had raised investors’ expectations that the authorities might go easier on the booming business. Instead, the bill would give owners of cryptocurrencies up to six months to liquidate, after which penalties will be levied.

Officials are confident of getting the bill passed into law as Prime Minister Narendra Modi’s government holds a vast majority in parliament. If the prohibition becomes law, India would be the leading major economy to make holding cryptocurrency illegal. Even China, which has forbidden mining and trading, does not penalize possession.

‘Greed’ Over ‘Panic’

Bitcoin, the world’s largest and most prominent cryptocurrency, hit a record high of $60,000 on Saturday, nearly duplicating in value this year as its approval for payments has increased with support from such high-profile backers as Tesla Inc CEO Elon Musk.

According to industry estimates, in India, transaction volumes are swelling, and 8 million investors now hold 100 billion rupees ($1.4 billion) in crypto investments despite government threats of a ban. No official data is available.

The money is propagating rapidly every month, and you don’t want to be lying on the sidelines. Even though people are worrying due to the possible ban, greed is driving these opportunities. User registrations and money inflows at regional crypto-exchange Bitbns are up 30-fold from a year ago. Unocoin is one of India’s best exchanges, added 20,000 users in the first two months of 2021, despite concerns over the ban.

ZebPay also did as much volume per day in February 2021 as they did in all of February 2020. Top Indian administrators have called cryptocurrency a “Ponzi scheme.” The plan is to ban individual crypto assets while promoting blockchain. This secure database technology is the backbone for virtual currencies and a system that experts say could revolutionize international transactions.

The government’s progress would be “calibrated” in the extent of the penalties on those who did not reimburse crypto assets within the law’s grace period.

Penalty

A government panel in 2019 suggested a jail term of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue, or deal in cryptocurrencies. It is unknown whether the new bill includes jail terms and fines as the discussions over the subject is in their final stages.

In March 2020, India’s Supreme Court scratched down a 2018 order by the central bank forbidding banks from trading in cryptocurrencies, prompting investors to accumulate into the market. The court directed the state to take a stand and draft a law on the subject.

The Reserve Bank of India voiced its concern again last month, citing what it said were risks to financial stability from cryptocurrencies. Simultaneously, the central bank has been working on launching its digital currency, a step the government’s bill will also encourage. Despite the market’s well-being, investors are aware that the boom could be in danger.

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