India's government is considering introducing an outright ban on cryptocurrency that would see 10-year jail sentences doled out to anyone caught trading, mining or holding the stuff.
The “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” has been some time in the making – India's Prime Minister Narendra Modi set up a panel to investigate how best to regulate cryptocurrency back in November 2017.
Driving the investigation are government concerns that cryptocurrency is being adopted for criminal activities like money laundering. The outright ban has received the support of several governmental bodies, including the Income Tax Department and the Central Board of Indirect Taxes and Customs (CBIC), but officials at the Reserve Bank of India (RBI) have denied all knowledge, CoinDesk reports.
What's more, insiders have expressed some skepticism over the real-life impact of the legislation if it was ever to go into effect, a fact in itself that is not yet guaranteed.
“It’s premature to come to a conclusion on this," Vishal Gupta, a CEO of multiple crypto-based currencies, told Live Mint. Adding the part of the bill that has been so widely discussed refers to illegal activities using cryptocurrencies – which is equivalent to saying that using rupees for illegal activities is illegal.
Cryptocurrencies like Bitcoin have been something of a controversial invention. Not only do they come with a large carbon footprint – one study found they could burn down our remaining carbon reserves within decades, while another from 2017 suggests Bitcoin alone guzzles up as much energy per annum as Ireland – they have been used for all sorts of shady dealings, from illegal pornography to drug trafficking to fraud. Some astronomers have even expressed concerns that it could be hurting our search for alien life.
According to one report, governments worldwide may be forced to outlaw Bitcoin because of its capacity to store illicit content but if this bill is to go ahead, India wouldn't be the first to try and institute a ban of its own accord. Egypt introduced a ban in 2018. That was lifted last month. Meanwhile, countries including China, Russia, Vietnam, Bolivia, Columbia, and Ecuador enforce their own bans to a more or lesser extent, Investopedia reports.
While the bubble may have burst for Bitcoin, cryptocurrency analysts are feeling optimistic. It is now trading below $8,000 – well below the $20,000 peak it (almost) reached in 2017 – but experts expect this value to rise, as big-name brands like AT&T, Starbucks, and Wholefoods have started accepting cryptocurrency payments.
As for India, the very bill that attempts to restrict cryptocurrency usage also suggests the introduction of a national cryptocurrency, the "Digital Rupee".