Published: 31-03-2021

Bans are in the air. India is sensing the smell of the cryptocurrency ban. Trading, mining, possession, or mere holding of this virtual currency would attract penalty as per information from Reuters. Though signals hint at a partial ban. Giving a sense of relief for the tech-savvy, there are chances that the technology part of cryptocurrency may be spared from the proposed ban.

Before diving further, let us understand what cryptocurrency means, its types, and the associated details. Cryptocurrency can be understood as a digital format of currency that can be rendered for goods and services. Bitcoin, WazirX, BuyUCoin, Coin DCX, Coinswitch, Giottus are some of India’s prominent cryptocurrencies. The technology employed behind cryptocurrency is called ‘Blockchain’. The digital currency enthusiasts envision cryptocurrency as 'next-gen currency'. As per the subject matter experts, though cryptocurrency might be selling like hot-cakes, the associated risk owing to its instability and volatility persists.

The bill which is amongst the most rigorous ones in the world would classify the possession, handling, transferring, and other allied activities in connection with cryptocurrency as illegal as per a report from Reuters. There still will be a provision of 6 months to liquidate the assets. As per the report from sources, there may be a ban on private crypto assets, though blockchain technology that constitutes the pillar of virtual currency will be promoted. Coincidentally the news shares the same timeframe when the world’s biggest cryptocurrency ‘Bitcoin’ witnessed a record figure of $60,000 almost touching a double value for itself this year.

Within a short period, this digital asset had become one of the favourite forms of currency for many traders and investors. A major reason behind this is the cryptocurrency to be seen as the ‘currency of the next gen'. Given that there are maximum chances for this bill to be passed and thus become a law, India will be crowned as the pioneer economy to ban cryptocurrency and penalise its holding and possession. Though China had banned mining and trading, possession of cryptocurrency was spared from being penalised.

Exploring the statistical data of India, an estimated count of over and above 7 million people have invested in more than $1 billion in cryptocurrency. The challenge is to get it liquidated before the law is enforced. Traders have kept their fingers crossed, on the belief that there will be not a complete shutdown but only some alteration in the regulating trade. To add to their anxiety, there are also chances that the IP address of the trading firms may get blocked by the government of India. Moreover, this notion further gets stronger because of its proximity with the consideration period of Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Parliament.

Our honourable Finance Minister says that this is not just a closure of our minds, but experimental ways to bring out possible oppurtunities in the digital world of cryptocurrency. A carefully assessed and reformed set of policies would be soon disclosed based on this.

Sources

• https://www.businesstoday.in/technology/india-is-set-to-ban-bitcoin-dogecoin-and-other-crypto-money-with-move-that-targets-miners-and-traders/story/433844.html?utm_source=recengine&utm_medium=web&referral=yes&utm_content=footerstrip-1&t_source=recengine&t_medium=web&t_content=footerstrip-1&t_psl=False
• https://www.reuters.com/article/uk-india-cryptocurrency-ban-idUSKBN2B60QP
• https://economictimes.indiatimes.com/tech/technology/latest-outreach-by-crypto-exchanges-addresses-governments-concerns/articleshow/81739103.cms