The news from India has proved costly for the crypto market, especially for bitcoin. Although the world's first cryptocurrency has been able to pare some of its recent steep losses and resume its rally, warning reports on a potential ban on cryptocurrencies from India are still putting pressure on the digital currency.
Notably, the Indian government is not just discussing the possibility but is already drafting a bill that would ban all private cryptocurrencies in the country. Many states have repeatedly voiced opposition to cryptocurrencies, but no single major economy has dared to take such a step. Even China, whose government exercises tight control over almost everything, has abandoned this idea, at least until the launch of its own digital currency.
If the ban becomes law, India will become the first major economy to make holding cryptocurrencies illegal, the sources noted.
According to experts, this measure is hardly surprising as it is in line with the policy pursued by the Indian government towards bitcoin. In early 2021, the authorities introduced a law to ban private cryptocurrencies such as bitcoin while building a framework for an official digital currency, recognizing it as an ineffective and unreliable instrument for financial transactions. They believe that the largest cryptocurrency can be used for various illegal activities and it is subject to market fluctuations.
The bill would give cryptocurrency holders up to six months to sell their assets. Otherwise, they would face severe penalties. The right-wing Bharatiya Janata Party is currently the ruling one, which means that the bill will most likely be passed by parliament.
