The Indian government will weigh the recommendations to ban cryptocurrencies in the country and introduce imprisonment up to ten years for dealing with crypto, the Department of Economic Affairs of the Government of India confirmed today. (Updated on 13:12 UTC: updates throughout the entire text.)
At pixel time (13:04 UTC), bitcoin trades at c. USD 10,244 and is down by 2.7% in the past hour and by 1.6% in the past 24 hours.
"<…> Draft Bill will now be examined in consultation with all the concerned Departments and Regulatory Authorities, before the Government takes a final decision," the Department said in the press release, referring to a report and the draft bill prepared by the Inter-Ministerial Committee in February 2019.
The press release confirmed previous unsourced reports that anybody who mines, holds, or sells cryptocurrencies might be punished with a jail term if the new proposal is accepted. Furthermore, the announcement also confirmed that India also might launch their national coin: "The Group has also proposed that the Government keeps an open mind on official digital currency."
However, the authors of the report gave also proposed to "establish a Standing Committee to revisit the issues addressed in the Report as and when required."
Some of the key points in the report:
- The Committee recommends that all private cryptocurrencies, except cryptocurrency issued by the State, be banned in India.
- The Committee also recommends that all exchanges, people, traders and other financial system participants should be prohibited from dealing with cryptocurrencies.
- The Committee has recommended a law banning the cryptocurrencies in India and criminalizing carrying on of any activities with cryptocurrencies in India.
- "Whoever directly or indirectly mines, generates, holds, sells, deals in, transfers disposes of or issues Cryptocurrency or any combination thereof with an intent to use it <…> shall be punishable with fine of with imprisonment which shall not be less one year but which may extend up to ten years, or both<…>"
- Whoever directly or indirectly promotes, issues any advertisement, solicits, abets or induces any participation in any activity involving the use of Cryptocurrency <…> shall be punishable with fine or imprisonment which may extend up to seven years or both.
Previous reports by local media indicated that the draft bill may be softened and "mild punishment" might be included in the draft bill for the individuals who are using cryptocurrencies on a "non-commercial basis."
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However, the Committee seems to be positive towards the distributed ledger technology (DLT):
"The DLT-based systems can be used by banks and other financial firms for processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market."
Subhash Chandra Garg, Secretary of the Department of Economic Affairs, tweeted today that "Private crypto currencies are of no real value. Rightly banned."
“If the government decides to take such a drastic step then India will stand to lose out significantly on the technology front,” Sathvik Vishwanath, co-founder, Unocoin, an Indian crypto trading platform, told Reuters. Nischal Shetty, CEO of WazirX, another Indian cryptocurrency exchange, said, they were still hopeful that the panel’s report would not be accepted in its current form.
By putting a plan to ban, the committee has not just hampered the chances of financial inclusion for the 21st century, but also showed how flawed certain logics can be.
If Bitcoin had no value, it wouldn't survive 10 years and wouldn't have gotten stronger by the day.
— Naimish Sanghvi (@ThatNaimish) July 22, 2019
Infact the Indian digital Ruppee will not be having any value if they are not using Blockchain Technology for it and not making it decentralized. It will not be more than a dummy currency which will be centralized by RBI and common people will become fool once again.. 🙄
— Prateek kumar (@CryptoMaster007) July 22, 2019
Check Mr Garg's choice of words. He said PRIVATE cryptocurrencies.
I might be reading too much into it because pvt cryptocurrencies do not include BitCoin.
We need Mr Garg to clear what he means by Pvt ones.
— Fiat_Renegade (@FiatRenegade) July 22, 2019