India to Propose Cryptocurrency Ban

India is preparing to propose for a law to ban the cryptocurrencies, to fine anyone who is trading in India or to fine anyone even for holding such digital assets. India will be rolling out the rule in a potential blow to millions of the investors who are piling into red-hot asset class.

Highlights

The bill that will be proposed would be one of the strictest policies in the World against cryptocurrencies. The bill would be criminalising the possession, issuance, mining, trading and transferring of the crypto-assets. The bill would provide the holders of cryptocurrencies up to six months to liquidate. After six months, penalties would be imposed. If this bill would become a law, then India will become the first major economy that will hold the cryptocurrency illegal. The other major economy, China, though have banned mining & trading of the cryptocurrency but it has not penalised its possession.

Background

The central government will propose this bill in line with the government agenda of banning the private virtual currencies like bitcoin apart from building a framework for the official digital currency.

Bitcoin Transaction across world

Bitcoin is the world’s biggest cryptocurrency. The currency hit a record high of $60,000 on March 13, 2021. This volume accounts for the double than what it was in previous years. The amount has doubled because its acceptance for payments has increased with the support of high-profile backers like CEO of Tesla Inc, Elon Musk. Indian government is to ban the use of cryptocurrency in India, despite that the transaction volume in India are increasing. In India, nearly 8 million investors are holding 100 billion rupees as per the estimates of industry.

Cryptocurrency

It is a digital asset which works as a medium of exchange where individual coin ownership records are stored in the ledger in the form of computerized database. These records are stored using a strong cryptography so as to secure the transaction records. It also helps in controlling the creation of additional coins and also verify the transfer of coin ownership.

Month: Current Affairs - March, 2021