Reactions as India ponders ban on cryptocurrencies

Reactions have trailed India’s plan to ban cryptocurrencies. The world’s second-most populous nation revealed on Tuesday that it is on track to prohibit all but a few private digital currencies as part of a new financial regulation bill.

The ‘Cryptocurrency and Regulation of Official Digital Currency’ bill will create a facilitative framework for an official digital currency to be issued by the Reserve Bank of India, and ban all private cryptocurrencies.

Such a pre-verification approach would create obstacles for thousands of peer-to-peer currencies that thrive on being outside the ambit of regulatory scrutiny, according to the analyses made by

No official data is available but industry estimates suggest there are 15-20 million crypto investors in India, with total crypto holdings of around 400 billion rupees (€4.77 billion).

Earlier this month, prime minister Narendra Modi said all democratic nations must work together to ensure cryptocurrency “does not end up in wrong hands, which can spoil our youth” – his first public comment on the subject.

Modi recently chaired a meeting to discuss the future of cryptocurrencies, amid concerns that unregulated crypto markets could become avenues for money laundering and terror financing, sources separately said on Saturday.

The new rules are also likely to discourage marketing and advertising of cryptocurrencies, to dull their allure for retail investors, said an industry source who was part of a separate parliamentary panel discussion held on Monday.

The government is looking to classify crypto as an asset class, as demanded by the crypto exchanges, rather than as a currency, two sources told Reuters.

But the senior government official told Reuters that the plan is to ban private crypto-assets ultimately while paving the way for a new Central Bank Digital Currency (CBDC).

The Reserve Bank of India, which has voiced “serious concerns” about private crypto is set to launch its CBDC by December.

Ban will hit prices

“The existing traders and investors will have to book losses, opening the floodgates for huge financial claims and disputes. All of this, will eventually lead to legal recourse with numerous court cases because of the huge investments already made, with a couple of court rulings already having been passed on the subject matter,” said Professor Padmanabha Ramanujam, Dean at IFIM Law School and a cryptocurrency expert.

But the cryptocurrencies are global and will not be affected by any particular country taking a decision. Shivam Thakral, CEO of BuyUcoin, a homegrown cryptocurrency exchange, told, that the global crypto market is “…too big to be banned and regulators are expected to respect people’s choices allowing them to choose their investment products.” India’s crypto investments have crossed the $10 billion mark which reflects the mood of institutional and retail investors as well as users on online pokies nz.

Zerodha co-founder Nikhil Kamath, meanwhile, wrote on Twitter “Is the Indian govt banning cryptos? What happens to everything in circulation already?”.

“The problem with bitcoins is that there are 1,000 different similar coins. If anyone can create currency, what’s the point of currency. A 100 years ago if 20 of my 100 neighbours started their own currency, I would favour the one with the most muscle, ie govt, for me,” Kamath had tweeted on 16 November.

Nischal Shetty CEO, Founder Wazir X, exclusively told BT, “The stance of government looks similar to the last one. Will have to go through the contents of the bill. Bitcoin is a public cryptocurrency on a public blockchain.”

He also added, “This is a big moment for India… Our nation has come a long way in these 3 years! It speaks volumes about how India is determined to dominate the web 3.0 era.”

Kashif Raza, founder of crypto education platform Bitnning pointed out that the government’s proposal “[what] we have today seems to be similar to the Bill presented by the government last time as well. The only thing that is spooking crypto investors now is the clause about banning private cryptocurrencies. Basically if we go by this, only those backed by the government will be allowed, not the rest. But this is not the final one. We need to exercise caution and wait for the full bill to be tabled in the parliament.”

Sathvik Vishwanath, Co-founder and CEO Unocoin commented, “The definition of what constitutes ‘private cryptocurrency’ is not available anywhere, no matter whichever we try to read it. Also concerning the few lines that we have today from the government, it is the same as the bill they presented before. Nothing seems to have changed. We have to tread cautiously about this. it is a very arbitrary title that was there last time, it is the same now as well. If we go by the three, four lines that have come out today, it could seem like that there is no new bill, it is the same as the old one. For the time being, we just cannot make any sense out of this yet. But yes, investors are certainly apprehensive.”