A senior Indian government official informed Reuters that the nation of India will propose a law banning cryptocurrencies. The bill would be a major blow to the industry, as it would penalize anyone who owns, trades or extracts digital assets, including bitcoin.
Three years ago, the Reserve Bank of India (RBI) tried to ban the cryptocurrency, preventing banks from doing business with companies in the industry. Although India’s supreme court rejected the ban in 2020, it looks like a new, even stricter ban will soon be proposed.
“The official said Reutershowever, the plan is to ban private cryptographic assets, while promoting blockchain – a secure database technology that is the backbone of virtual currencies, but also a system that experts say could revolutionize international transactions. Reuters reported.
This coincides with recent speculation that India is considering launching its own central bank digital currency (CBDC). This news suggests that the government understands the potential impact of digital currencies, but has not yet embraced those with private capital, such as Bitcoin.
Despite this regulatory confusion, India remains a potential hotbed for Bitcoin adoption. With a population of 1.3 billion people and a widespread lack of access to traditional banking services, Bitcoin could be the trigger for individual freedom and monetary access.
“In India, despite government threats of a ban, the volume of transactions is increasing and 8 million investors now own 100 billion rupees ($ 1.4 billion) in crypto-investments, according to industry estimates,” Reuters.
In addition, according to data from Coindance, India maintained a consistent volume of LocalBitcoins, at 113,772,416 rupees (about $ 1.5 million) for the week beginning March 3, 2021. The proposed ban, while premonitory, does not appear to have an impact on the volume of transactions in India, the a little for the moment.
It should also be noted that it is unrealistic for a government to “ban” decentralized technology such as Bitcoin, which is free and open-source software that can be accessed and exploited without the approval of any third party. However, they may impose sanctions that make it difficult to access or use Bitcoin easily.
As Bitcoin adoption inevitably increases in India, so will the potential benefits that network participants will gain. These benefits can far outweigh any benefits sought by the proposed ban.