India’s Proposed Bill Banning Cryptocurrency Payments Could Mean Jail for Violations – Document

FILE PHOTO: Illustration showing representations of virtual cryptocurrency
FILE PHOTO: The virtual cryptocurrency representations seen in this illustration were taken November 28, 2021. REUTERS/Dado Ruvic/Illustration

December 7, 2021

By Aftab Ahmed and Nupur Anand

MUMBAI (Reuters) – Proposed law banning the use of cryptocurrencies as a payment method in India also seeks to get law violators arrested without warrants and held without bail, according to reports. a source and a summary of the bill seen by Reuters.

Prime Minister Narendra Modi’s government has previously marked that it plans to ban most cryptocurrencies – a move that follows China’s measures in September this year to intensify its crackdown on cryptocurrencies. .

According to the bill’s summary, the Indian government is planning to “generally ban all activities by any individual in terms of mining, creating, holding, selling, (or) trading” in digital currency. digital as a “medium of exchange, store of value, and a unit of account”.

Overlapping any of these rules would also be “perceivable,” meaning arrest could be made without a warrant and “not available,” it said.

The source, who has direct knowledge of the matter, was not authorized to speak to the media and declined to be identified. The Treasury Department did not respond to an email seeking comment.

While the government has previously said that it aims to promote blockchain technology, the proposed law will also deal a blow to its use as well as to the irreplaceable token market in India. , the lawyers said.

Anirudh Rastogi, founder of law firm Ikigai Law said: “If no payments are allowed and an exception is not made for transaction fees then it will also stop blockchain development and NFT for a while. effectively,” said Anirudh Rastogi, founder of law firm Ikigai Law.

Government plans to drastically crack down on cryptocurrency trading have caused a frenzy in the market and some investors have exited with substantial losses.

Lured by the flood of advertisements and the increasing price of cryptocurrencies, the number of investors in crypto assets has skyrocketed in India.

Although official data is not available, industry estimates suggest that there are between 15 million and 20 million crypto investors in the country, with a total holdings of around 450 billion Indian rupees ($6 billion).

The government now plans to drastically reduce ads seeking to attract new investors, according to a draft summary and sources.

The source added that self-regulatory wallets that allow people to store digital currency outside of exchanges are also likely to be banned.

The tough new regulations stem from serious central bank concerns about digital currencies and are intended to introduce safeguards to keep the traditional financial sector out of cryptocurrencies, the summary says. draft said.

The Securities and Exchange Commission of India (SEBI) will be the regulator of crypto assets, the draft summary also said.

(Reporting by Nupur Anand and Aftab Ahmed; Editing by Euan Rocha and Edwina Gibbs) India’s Proposed Bill Banning Cryptocurrency Payments Could Mean Jail for Violations – Document

Caroline Bleakley

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