While India was gradually asserting itself as a stronghold of the crypto space in Asia, the government at the head of the country did not hear it with this ear. After having failed once before to pass a law prohibiting the use of cryptomoney on the territory, the Indian state is once again taking the blame. The spectre of a ban has never been so close, even though the current trend is much more akin to a restriction of the scope of use.
What can we expect from the 2021 Cryptography Bill in India?
In our last article on the same subject, we gave you a broad overview of the history of the Indian government’s attempts to ban cryptomoney from the country. These were intended to set the stage for the next local CBDC supported by the Reserve Bank of India (RBI). The first attempt at a ban was unsuccessful and the new bill is expected to be less rigid. Indeed, it should be based instead on a restriction on the forms of business and other activities related to cryptomoney and their use in the country.
As it stands, data suggests that 7 to 8 million Indians hold nearly $1 billion in cryptographic assets. The majority of them have in fact opted for Bitcoin (BTC) not as a currency, but with the aim of making it a valuable store of value. Some observers believe that it is unlikely that this use of cryptography can be called into question by the bill. In any case, the moment of truth is approaching for local actors in the cryptosphere who can now fear the worst.
Indian government opts for ordinance to bypass parliament
The information that was released by the CNBC clearly shows that the government is determined this time to put an end to cryptography in the country. Indeed, this is an option that is usually used only in cases of extreme urgency, particularly to unblock a crisis. The players in the sector are rightly surprised that the situation is perceived as such by the government authorities.
Despite the wave of indignation about the method used, the process seems to have already started with initial actions in this direction. For example, the cabinet secretariat of the Ministry of Finance has reportedly been instructed to prepare the draft ordinance. It is, moreover, expected that the new law on cryptomoney will be introduced within a month of the approval of this ordinance.
Should the Indian government’s project be successful, there is a good chance that the approach adopted will be adopted by other nations that wish to put their local CBDCs at the forefront. The year 2021 is already shaping up to be a hard blow for the crypto space in many countries.
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