India on the Path of Banning Private Cryptocurrency?

The Indian parliament is set to start cracking down on the trade of private cryptocurrencies with a new law that is set to be introduced this month.

The Indian parliament hopes that the imminent ban will somewhat centralize digital currencies in the country, paving the way for the Reserve Bank of India to “gain control over digital money.” Both the bank and Prime Minister Narendra Modi have warned that cryptocurrencies could “spoil our youth”, and pose dangers to the country’s macroeconomic stability.

This move by the government should not come as an outright surprise, given that, earlier this year, it “considered criminalising the possession, issuance, mining, trading and transference of crypto-assets.”

PM Modi held a meeting about the future of crypto assets in late November, where the topics and concerns of money laundering and terror financing were also brought up, among others. However, many Indian crypto traders are still hopeful that the government will not go forward with their intentions, calling the trade of digital assets a “great way to build up wealth in India.”

In fact, India has recently become one of the fastest growing crypto markets in Asia, having 15 homegrown cryptocurrency exchange platforms and with roughly 15 to 20 million people in the country estimated to own cryptocurrency. 

If this growing trend continues, it is possible that the government may have to rethink their strategy when it comes to the ownership of crypto assets, especially given the fact that this crypto boom occurred after the Supreme Court overturned a similar ban last year, with Indian holdings that now approximately total $6 billion