Indian move to ban cryptocurrencies comes as a shock to many

11:51 PM | 23 Nov, 2021
Indian move to ban cryptocurrencies comes as a shock to many

The Indian parliament announced on Tuesday the government would introduce a bill to ban private cryptocurrencies and create a framework for a central bank-backed digital money.

The proposed bill “seeks to prohibit all private cryptocurrencies in India”, the Lok Sabha said. The move comes after Prime Minister Narendra Modi warned last week that Bitcoin presents a risk to younger generations and could “spoil our youth” if it ends up “in the wrong hands”.

It is the latest such move by a major emerging economy, after China declared all cryptocurrency transactions illegal in September this year.

India's crypto market has boomed since the country's Supreme Court overturned a previous ban in April last year, growing more than 600 per cent over the past year according to research by Chainalysis. Between 15 and 100 million people in Asia's third-largest economy are estimated to own cryptocurrencies, with total holdings in the billions of dollars.

Their investments will now face an uncertain future.

India's central bank announced in June that it is working to introduce its own digital currency by the end of the year, while warning it has “serious concerns” about private cryptocurrencies like Bitcoin, Ethereum and others.

The bill, to come before the new legislative session, will allow for some exceptions to promote cryptocurrency technology, according to the parliament's bulletin of upcoming business, but no further details about the proposed legislation were released.