The Strategist

India's parliament to revisit the idea of banning cryptocurrencies payments

11/25/2021 - 10:12

A measure prohibiting the use of cryptocurrencies for payments will be revisited by India's parliament. If enacted, India will join China as the second major country to prohibit such transactions. The possibility of a ban prompted a sell-off at the Indian Bitcoin market.

According to a notice on the website of India's lower house of parliament, the government will present a bill to outlaw private cryptocurrencies.

According to the text, the law intends to establish an official digital currency in India, which would be issued by the country's central bank. The bulletin indicates that exceptions to the restriction on private cryptocurrencies would be permitted to "advance the underlying technology of cryptocurrencies and their uses." Two sources told Bloomberg that the bill's full provisions had yet to be revealed.

According to Bloomberg, India is considering recognizing cryptocurrency as a financial asset. According to them, the law might make it illegal to use cryptocurrency as legal cash, but not for investing. Simultaneously, the legislation may establish a minimum investment level to safeguard small investors.

According to the Financial Times, if passed, India will become the world's second-largest jurisdiction to prohibit cryptocurrency transactions. The People's Bank of China deemed cryptocurrency transactions unlawful in September. Digital currencies could not circulate in the market, according to the Chinese regulator, and any transactions using them, including services from foreign exchanges to Chinese investors, would be considered illicit financial activity. China outlawed Bitcoin transactions by banks and payment providers back in May.