India could ‘prohibit all private cryptocurrencies’

The Indian government could potentially “prohibit all private cryptocurrencies” in a newly proposed bill, according to a parliamentary bulletin from November 23.

The Cryptocurrency and Regulation of Official Digital Currency Bill would be aimed at forming “a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India”.

However, the bill said it would allow “for certain exceptions to promote the underlying technology of cryptocurrency and its uses”.

The bulletin appeared on the Indian parliament’s official website, Lok Sabha.

India’s prime minister Narendra Modi said last week regarding cryptocurrency: “It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth.”

The news comes after The People’s Bank of China (PBOC) announced all activities related to non-government digital assets would be illegal from September.

Reports of the South Asian nation introducing a CBDC first surfaced in September, when Reserve Bank of India (RBI) deputy governor T Rabi Sankar said the central bank is considering introducing a CBDC in a gradual manner at a conference.

The country has previously taken a hard line on cryptocurrency regulation; a government panel proposed a ban on all private cryptocurrencies in 2018 and suggested up to 10 years of jail time for violations.

Digital assets are also receiving regulatory scrutiny in the UK, earlier this month the deputy governor of financial stability at the Bank of England warned that the risks crypto assets could pose to the economy are fast approaching.

The Bank of England and HM Treasury also announced they would be launching a new consultation to explore the potential for a UK Central Bank Digital Currency (CBDC) earlier this month.

“India’s plan to ban cryptocurrencies has not wrought the same damage on the Bitcoin price as China’s summer crackdown, but it nonetheless marks yet another stumbling block in crypto’s advancement as an economic force in the real world,” said Laith Khalaf, an analyst at broker AJ Bell. “There may be some question of how the government can prohibit the trading of cryptocurrency on private computers across international exchanges.”

He added: “But a ban would at least prevent advertising and marketing activities, which should limit activity.”

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