RIYADH: Plans by the Indian government for a new bill that would bar most private cryptocurrencies has triggered heavy selling in the country’s digital currency markets, said media reports.
Prime Minister Narendra Modi’s government has proposed to help India’s central bank create an official digital currency, according to a description of the bill, posted on its Parliament’s website.
India is preparing a bill to regulate cryptocurrencies, which will be presented to the Parliament in its session on Nov. 29.
“The Indian government’s decision to propose a ban on cryptocurrencies follows a similar approach to China,” Abdullah Mashat, managing director of a private Saudi retail company told Arab News.
“Such move will not discourage people from owning crypto, but will discourage fintechs and users in migrating to other welcoming economies,” he said. The content of the bill has not yet been finalized, according to Bloomberg.
“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 text reads. Investors are concerned that the government may eventually ban cryptocurrency trading once the bill is presented to Parliament next week.
This led to a sharp drop in the bitcoin trading price in the Indian local currency compared to the rest of the world.
“The extent of the ban under the proposed legislation does not seem to be clear. While the bill’s summary states its intention is to prohibit all non-government cryptocurrencies, it also talks about allowing for ‘certain exceptions,’” said Mikkel Morch, executive director ad risk management at crypto/digital assets hedge fund ARK26, in a note.
“Judging from Prime Minister Modi’s tweet from a few days ago, the potential use of cryptocurrencies for illicit activities or manipulative investment schemes may be some of the main concerns here,” he added.
