An anonymous source who claimed to be a senior official in the Indian Ministry of Finance said that the use of cryptocurrencies will soon be completely banned in the world’s second most populous country.
Speaking to Bloomberg, the source said that the use of cryptocurrency in all its forms will be banned under a new law, which is expected to be brought before Parliament soon. Cryptocurrency transactions through foreign exchanges will also be blocked.
The source said cryptocurrency investors are expected to have a transition period of three to six months to liquidate assets after the new law goes into effect.
The official stressed that cryptocurrencies have been targeted by Indian lawmakers due to lack of support from the Reserve Bank of India (RBI).
In January, the Indian Parliament introduced a bill “On cryptocurrency and regulation of the official digital currency for 2021” for discussion in the current parliamentary sessions on the country’s budget.
The purpose of the bill was described as creating a potential framework for central bank digital currency issued by the Reserve Bank of India and “banning all private cryptocurrencies in India”.
Satwick Vishwanath, co-founder and CEO of the major Indian cryptocurrency exchange Unocoin, told Bloomberg that the local crypto industry is “looking forward to the details that will define their next step.”
“If the government continues to ban all cryptocurrencies except those that are backed by the government, there will be no point in continuing our work in India. But we have to wait and see.”
In March 2020, India’s Supreme Court lifted the general ban that the Reserve Bank of India (RBI) had imposed in April 2018 on local banks providing services to cryptocurrency companies, effectively legalizing cryptocurrency companies across the country.
However, India’s Ministry of Finance proposed a law to once again ban cryptocurrencies across the country in June 2020.