India to ban private cryptocurrencies

The Indian government have made a bold move to move ahead and ban cryptocurrencies

The Indian government is preparing to impose a full ban on private cryptocurrencies, following a recent block made by China on the digital sector.

The ban would relate to all private cryptocurrencies with certain exceptions to allow the promotion of the underlying technology and its uses.

Cryptocurrency prices dropped on Indian exchanges after the decision on the bill’s future was announced.

The proposals made by India were flagged in a parliamentary bulletin listing upcoming legislation which included one paragraph on “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”.

But despite the imposed ban, the accompanying description of the bill appeared to leave some room for using cryptocurrencies.

“To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India,” it read.

“The bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”

The Prime Minister’s response:

India’s prime minister, Narendra Modi, stated last week that cryptocurrencies could “spoil our youth” and the country’s central bank has repeatedly warned, in line with other central banks, they could pose “serious concerns on macroeconomic and financial stability”

Despite bans imposed by China and now India – other economies around the world are embracing digitalised currencies

In September, El Salvador became the first country to accept a cryptocurrency, bitcoin, as legal tender.

But major economies have generally been wary of digital currencies, with the deputy governor of the Bank of England, Sir Jon Cunliffe, warning that they could cause financial meltdown.

Nonetheless, the BoE and the Treasury are to launch a formal consultation into a UK central bank digital currency next year.