- India proposes new legislation that would ban the use of cryptocurrencies in the country.
- The Asian country is also working on a CBDC project that would be backed by its fiat currency.
The government of India has proposed a bill which would ban the use of private crypto assets and has also announced its decision to issue a digital currency that would be backed by its fiat currency, rupee.
Indian’s crypto ban proposal
In the proposed bill, the Indian government said that only “certain exceptions” would be granted to promote the underlying technology of cryptocurrency.
The crypto industry in India has had no form of regulations whatsoever as the authorities have paid little to no attention to regulating the industry, instead they are proposing an outright crypto ban.
This would not be the first time that the Indian government has taken a draconian step towards the crypto market. It would be recalled that the Reserve Bank of India earlier imposed a crypto ban, and ordered the banks in the country not to provide any services for crypto exchanges or traders.
However, the Supreme Court of the country lifted this crypto ban which led to a surge in the numbers of investors in the industry. The current proposal could be fueled by the bank’s decision to work on a central bank digital currency (CBDC) project.
India’s “Private” cryptocurrencies vague
The new bill could take a long time before it gets passed by the authorities, however, one area of contention in the bill is its definition of “private” which is at best vague.
Cryptocurrencies like “Bitcoin” and “Ethereum” run on decentralized public blockchains. This means that its ledgers are public and anyone can validate transactions and still run a node too.
It is unclear if the crypto ban would cover these crypto assets, however, this can be challenged in open courts to get a proper understanding of what the authorities mean by that.