According to a source and summary of the bill seen by Reuters, the proposed law that would ban the use of cryptocurrencies as a method of payment in India also seeks to make those who violate the law and arrest without warrant. and are caught without bail. ,
Prime Minister Narendra Modi’s government has previously flagged that it plans to ban most cryptocurrencies – a move that follows measures by China this September that has intensified its crackdown on cryptocurrencies.
According to the bill’s summary, the Indian government seeks to impose a general ban on all activities “mining, producing, holding, selling, (or) dealing by any person” in digital currencies as a “medium of exchange, store of value and”. making plans. a unit of account”.
Violation of any of these rules would also be “cognizable”, meaning that arrest without warrant is possible, and is “non-bailable”.
The source, who has direct knowledge of the matter, was not authorized to speak to the media and declined to be identified. The finance ministry did not respond to an email seeking comment.
Although the government has previously stated that it aims to promote blockchain technology, the proposed legislation would be a blow to its use as well as the non-fungible token market in India, the lawyers said.
“If no payments are allowed and exceptions are not made for transaction fees, it will also effectively halt blockchain development and NFTs,” said Anirudh Rastogi, founder of law firm Ikigai Law.
The government’s plan to crack down heavily on cryptocurrency trading created a frenzy in the market and many investors exited with significant losses.
Attracted by the flood of advertisements and rising prices of cryptocurrencies, there has been an increase in the number of investors in crypto assets in India.
Although there is no official data available, the industry estimates that there are around 15 million to 20 million crypto investors in the country, with total crypto holdings of around 450 billion Indian rupees ($6 billion).
According to the draft and source of the bill, the government is now planning to cut down heavily on advertisements that entice new investors.
The source added that self-custodial wallets that allow people to store digital currencies outside exchanges could also be banned.
The draft bill’s summary states that the tough new rules stem from central banks’ serious concerns about digital currencies and are intended to take safeguards to protect the traditional financial sector from cryptocurrencies.
The Securities and Exchange Board of India (SEBI) will be the regulator for crypto assets, the draft summary also stated.
This story has been published without modification in text from a wire agency feed.
Never miss a story! Stay connected and informed with Mint.
download
Our App Now!!
,