In what may become the Indian government’s latest move against the crypto industry, a bill that would punish cryptocurrency users with a 10-year prison sentence is currently making its rounds through the Indian legislature.
While the bill, named the Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019, still hasn’t been passed into law, the fact that the government is processing such a severe piece of legislation at all could be an indication that anti-crypto sentiment amongst Indian lawmakers is growing.
Indeed, local news source The Economic Times reported at the end of April that several law-enforcement bodies have already tacitly endorsed the bill, and are waiting for due process to occur before announcing their public support:
“A number of government departments including the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA) have endorsed the idea of a complete ban on the ‘sale, purchase and issuance of all types of cryptocurrency’ according to a government officials who did not wish to be named.” (sic)
Similar to China’s Ban, But Even More Severe
The bill could represent the emergence or growth of an effort to make India more like China in terms of its attitude toward cryptocurrencies; it clearly seems to have been created not just to place restrictions on the use of cryptocurrency within the country, but to eliminate its use entirely.
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China instituted bans on Initial Coin Offerings and domestic cryptocurrency exchanges in late 2017; the country has also attempted to block its users from accessing exchanges based in other countries, but it has stopped short of punishing crypto holders with fines or jail time.
Short on Crypto, Long on Blockchain?
However, the blockchain industry in China is still alive and well. And India doesn’t seem like it wants to stamp out its own blockchain industry, either.
In fact, hints that the Indian government would be moving towards a harsher stance on cryptocurrency originally appeared in April with the unveiling of the Reserve Bank of India’s regulatory sandbox for the blockchain industry.
While the sandbox allowed for blockchain to be tested on a small group of consumers, cryptocurrencies, exchanges, and token sales were not included in the sandbox at all. A number of analysts saw the exclusion of these kinds of platforms and services as an indication that the end may be nigh for them in India.
Lobbyists have called for RBI to reconsider the terms of the sandbox, and to at least allow testing of cryptocurrencies and cryptocurrency exchanges. However, no clear responses to the requests have been given.
Two Indian cryptocurrency exchanges made the decision to close their doors over the course of the last several months after in the face of regulatory uncertainty. If the Indian government continues down its current path, more could be forced to follow.