The government has been planning action against cryptocurrencies for the past few months but recent comments had given some hope to investors. However, if the new bill is enacted into law, it will be a point of concern for them. This will make India the first major economy to make holding cryptocurrency illegal. Even China, which has banned mining and trading, does not penalise possession.
The official said that investors will be given a window of six months to liquidate their assets before a penalty is levied on them. In India, over 7 million people are believed to have invested more than $1 billion in cryptocurrency and would be hoping for a way to get reimbursed before a law is imposed.
The industry is also hopeful that the government will not impose a complete on cryptocurrencies including and might just end up regulating the trade.
The official said that the plan is to ban private crypto-assets while promoting blockchain technology which forms the backbone for virtual currencies. The claims come at a time when Bitcoin has seen a fresh surge in price. World’s biggest cryptocurrency hit a record high of $60,000 on Saturday, nearly doubling in value this year as its acceptance for payments has increased with support from such high-profile backers as Tesla Inc CEO Elon Musk.
Interestingly, Union Finance Minister Nirmala Sitharaman has clarified that there will not be a complete ban on cryptocurrency. Speaking at the India Today Conclave South on Sunday, the finance minister said that the government is not shutting all windows for cryptocurrencies, or blockchain, and fintech as yet. She said that a Cabinet note was being readied in this regard, which will give exhaustive information on the formulation of cryptocurrency in India.
"My view on this is that, of course, the Supreme Court has commented on cryptocurrency and while the RBI may take a call on official cryptocurrency, from our side, we are very clear that we are not shutting off all options," said FM Sitharaman.