According to a recent report by Bloomberg, Indian lawmakers will soon introduce a law banning crypto trading. It would make India the exception in the Asian region where other countries have chosen to regulate the sector.
Details of the Bill
The new bill will first be discussed in the federal cabinet before it goes to parliament, according to anonymous sources. In the bill, the federal government will encourage the use of blockchain technology but it is not welcoming of crypto trading. Thus far, the Indian finance minister has not commented on the issue.
India’s Completed Relationship with Crypto
In 2018, India’s central bank had banned banks in the nation from handling transactions in the crypto sector. They made the decisions after increased fraud with the crypto sector. Most fraudsters were pushed into the crypto sector when the Prime Minister imposed a sudden ban on 80% of the country’s currency. Stakeholders in the crypto industry went to the Supreme Court and they managed to have the decision overturned in March 2020.
Crypto trading in India surged by around 450% in the following two months after the Supreme Court lifted the ban. The growth in crypto trading has revived concerns about Indians risking their savings amid the COVID19 economic downturn that has led to huge job losses.
The Future of Crypto Regulation in Asia
The final decision by India on crypto will play an important role in shaping the future of crypto regulation in India. Many countries in the region are still weighing their options. China, which was the first major Asian nation to ban crypto, recently allows Bitcoin to be traded as virtual property but not as currency. Besides that, the country plans to launch a central bank digital currency.
In India, the focus seems to be on finding use cases for blockchain technology. Some of the use cases they are looking into include securing the pharmaceutical supply chains, managing land records, and managing education certificates.
If India bans crypto, it could affect over 1.7 million Indians that trade in digital assets. It will also affect companies outside of India such as CoinSwitch, which is based in Singapore. The company recently launched operations in India and over 200,000 users had signed up to the platform.