Since 2018, the government in India has been uncertain about how to behave when it comes to cryptocurrencies, constantly deciding to ban them and then backtracking and declaring itself crypto-friendly and so forth. A vicious circle that makes the situation of miners and traders in the country very uncertain.
And so today comes yet another piece of news that India wants to ban cryptocurrencies. In fact, the Indian government has reportedly submitted a bill to stop the use of cryptocurrencies in the country.
This bill, if passed, would make it illegal to possess, transfer, trade, make payments, mine and do anything related to cryptocurrencies. In fact, as early as last January, the government decided to ban private digital currencies, a definition that includes Bitcoin according to the country’s regulations.
If the law passes, users would have six months to liquidate their cryptocurrencies. China has a similar law, which bans trading and mining, but not possession. In India, this would create the first law that could really stop the crypto market in the country altogether.
The penalty for holding crypto in India
In 2019, it was rumoured that the penalty for holding cryptocurrencies would be jail, even up to 10 years imprisonment.
These are, however, rumours. It is not yet clear what would happen with this new law.
Cryptocurrency adoption in India
Despite this, according to data from the end of January 2021 an analysis conducted by Bit2Buzz reported a 980% growth in users and 500% growth in volumes on crypto exchanges, after Bitcoin had reached its previous all-time high.
As early as November 2020, there were interesting growth figures for cryptocurrency adoption in the country. This was revealed at the time by a report by Arcane Research, which specifically analyzed bitcoin exchange volumes on P2P platforms such as LocalBitcoins and Paxful. On both platforms, volumes had more than doubled in 2020.