The Indian government is said to impose a complete ban on cryptocurrency investments.
BloombergQuint reported the news Thursday, citing an unnamed ‘senior Treasury Department official’. The ban will not be imposed overnight, according to the official, who said the government would give a three to six month transition period for existing investors to liquidate their investments.
Since India’s central bank does not support cryptocurrencies, the government will ban its use in all forms through a law to be passed in parliament, the official said. The ban would also restrict cryptocurrency trading through foreign exchanges, the report said.
India’s crypto law will be modeled on China’s crypto regime, which has effectively banned cryptocurrency trading, the official said. However, China has only banned fiat-to-crypto trading since 2017. Crypto-to-crypto trading is still allowed in the country.
India’s proposed “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” is listed for launch in Parliament’s ongoing budget session, which will close on April 8, with a pause between February 15 and March 8.
The bill aims to ban all “private cryptocurrencies” in India. The definition of private cryptocurrencies and the final text of the bill is not yet known. Still, Indian Finance Minister Nirmala Sitharaman suggested earlier this week that private cryptocurrencies include all digital currencies except those issued by a central bank.
According to the official quoted above, the bill will “shortly be sent to the cabinet of the Union for approval.”
Earlier this week, young India Finance Minister Anurag Thakur also said the bill is “being finalized and will be sent to cabinet shortly.”
As The Block has previously reported, the legislative process in India is taking a long time. Once a bill has been moved for consultation in the cabinet, it goes through various ministries for feedback. Once this process is completed, the bill will go to parliament. The parliament has its own approval procedures, including getting nods from the Lok Sabha (House of the People) and the Rajya Sabha (Council of States). Once the bill passes parliament, it goes to the President of India for final signing.
However, if the cabinet wants a specific bill to be passed, it can go for the ordinance. Regulations allow the Indian government to take immediate legislative action. Last week, there were reports that the government will likely adopt a cryptocurrency account through a regulation.
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