Prime Minister Narendra Modi
Prime Minister Narendra Modi speaks at the Y4D Foundation New India Conclave at Vigyan Bhavan in New Delhi, India on 16 July 2018. Shutterstock

A new Indian law, soon to be introduced in parliament, could see the use of crypto assets completely ban in the Asian country, Bloomberg reported on 11 February.

According to the publication, an anonymous source — claiming to be a senior Indian Finance Ministry official — revealed that a new law will soon be introduced in the Indian parliament, which will prohibit the use of cryptocurrency in the country. The new law is likely to be added to India’s “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”, which was introduced for discussion in January.

The anonymous source further said the country will give its crypto investors a grace period of three-to-six months to liquidate their crypto holdings once the law comes into effect. After this window closes, it is likely that those still holding digital assets will have their investments liquidated, the source added.

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While the new law is expected to ban the use of private cryptocurrencies in the country, it is also likely to provide a framework for the Reserve Bank of India (RBI) to issue its own digital currency. Bloomberg wrote:

“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.”

If this law is passed, it will not be the first time cryptocurrencies were banned in the country. Back in 2018, the RBI issued a blanket ban on local banks providing services to businesses and individuals dealing with crypto. The Supreme Court of India decided to lift the ban back in March 2020, following both public and industry-led petitions.

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