India is considering new regulations that would ban cryptocurrency in the country, penalizing anyone who holds, buys, or mines bitcoin and other digital currency, Reuters reported, citing unnamed government sources.
The proposed regulations would be the toughest worldwide and would effectively outlaw possession, issuance, mining, or trading of cryptocurrency, the source told Reuters.
The move aligns with India’s decision in January to ban private digital assets like bitcoin while the country develops its own framework for an official crypto. Investors had been hoping the government would go easier on the hot investment market.
The new mandates proposed by the Finance Ministry would give crypto holders up to six months to liquidate. After that time frame, anyone still holding digital currency will be hit with a fine, the official told Reuters.
If the measure passes — and officials think it will since Prime Minister Narendra Modi has a majority in parliament — India would be the first major economy to criminalize crypto investors. China banned mining and trading of crypto but doesn’t levy fines for possession.
Bitcoin is currently the highest-priced cryptocurrency worldwide and reached $60,000 on Saturday (March 13), a new record high. The digital currency has doubled in value since January, getting a push from Tesla’s Elon Musk and becoming a payment option on PayPal.
Despite talk by Indian officials that new regulations were on the horizon, Indian crypto trading has continued to soar and some 8 million people in the country now hold an estimated 100 billion rupees ($1.4 billion), according to industry estimates, per Reuters.
“The money is multiplying rapidly every month and you don’t want to be sitting on the sidelines,” crypto investor Sumnesh Salodkar told Reuters. “Even though people are panicking due to the potential ban, greed is driving these choices.”
Gaurav Dahake, chief executive officer of the crypto exchange Bitbns, told Reuters that new users are up 30 percent. Some 20,000 new investors flocked to Unocoin, among the country’s oldest exchanges, in January and February, despite talks of new regulations.
In March 2020, India’s supreme court reversed the central bank’s 2018 ban on cryptocurrency, stating that the law was unconstitutional.