Reports from India suggest that the country's government intends to introduce new regulations. They will ban the use of private cryptocurrencies and outline plans for the central bank's digital currency.
The Times of India reported that a bill entitled "Cryptocurrency and Regulation of Official Digital Currency" will effectively rule out the use of Bitcoin and other cryptocurrencies, while laying the foundations for the development and launch of India's CBDC.
The bill was presented Friday in Lok Sabha, which is the lower house of India's bicameral parliament. Details of the act emphasize the emphasis on creating a framework for the launch of CBDC. Despite the cryptocurrency ban, the project also suggests that there will be "some exceptions" that will promote blockchain technology and its applications.
The Times of India noted that the Indian government has long kept cryptocurrencies at bay. The main reason for the emphasis on limiting the use of decentralized cryptocurrencies is to protect investors from the risks associated with their trading and use.
That's not the first time…
We have heard about the possibility of a complete ban on the use of cryptocurrencies in India several times in 2020. In September last year, the long-awaited bill that was drafted in 2019 went to the Indian Cabinet of Ministers. At that time, it was reported that the law would essentially make it illegal to use cryptocurrencies in the country. It would also outlaw activities like mining and even the provision of stock exchange services.
India's central bank has in the past enforced a blanket ban that prohibited banks and financial intuition from handling anything related to digital currencies. This ban took effect in 2018 and prevented local banks from providing services to exchanges and other industry companies.
In March 2020, India's Supreme Court, following a petition from cryptocurrency exchanges and startups, overturned the ban. Before the ban was lifted, however, cryptocurrency exchanges and companies had to either move their businesses or operate in a peer-to-peer model.
The industry in India has always been choked by regulations, despite the fact that the local society clearly has a strong appetite for cryptocurrencies. In December 2020, data showed that India surpassed China in terms of P2P BTC trading volume. Following the lifting of the Reserve Bank ban, the country's Bitcoin trading volume increased by 87 percent.
