India will introduce a complete ban on investment in cryptocurrencies, and existing investors will be given a transitional period to exit their assets.
A senior Finance Ministry official said the cryptocurrency is not a fiat currency backed by the Reserve Bank of India and its use in all forms will be prohibited by a new law to be introduced to parliament.
Cryptocurrency investors will be given a transition period of three to six months after the new law enters into force to liquidate their investments. The purpose of the bill is to create a favorable foundation for the creation of an official digital currency to be issued by the Central Bank of India. The bill also aims to ban all private cryptocurrencies in India, however, it allows certain exceptions to promote the underlying cryptocurrency technology and its use.
The official said India’s new law would be based on China’s regulatory regime, which effectively banned the trade and use of cryptocurrency, while the government is working to release its own virtual currency. The law will soon be sent to the Union Cabinet for approval.
We are all waiting for details on the law that will guide our next course of action. If the government continues to ban all cryptocurrencies other than government-backed, there will be no point in continuing our business in India. Investors understand that the ban will not be sudden, and the government will provide a certain time, so they are not going to sell everything right away.
Unocoin CEO Sathvik Vishwanath
After the release of this information, prices for cryptocurrency in India fell by an average of 30%, but Tesla’s announcement of the purchase of bitcoins revitalized the market.
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