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India threatens crypto ban

Photo of: Joseph Stone
by Joseph Stone

For several months now, we have been hearing about different countries thinking about setting up regulations for cryptos. These discussions make the cryptosphere tremble. Indeed, the impact of a coercive regulation would be very bad for cryptocurrencies. Friday, January 30, 2021, India has just communicated on its project of regulation of cryptos. At first glance, this is cause for concern…

The news took everyone by surprise! On Friday, January 30, 2021, the Indian Parliament gave some clues on the implementation of a regulation of cryptos. The law under consideration would ban all so-called “private” cryptocurrencies in the country. At the same time, the country would set up a national electronic currency backed and managed by the Central Bank of India.

Nothing has been revealed about the cryptocurrencies that would be affected by this ban. However, there is good reason to believe that by “private”, the government means all electronic currencies other than those managed by the central bank. In this case, it would simply mean banning all cryptocurrencies in India!

This law is therefore frightening! “It’s time to be worried,” said (anonymously) a manager of a significant crypto exchange in the country in the Economic Times of India. Moreover, given the political composition of the Indian parliament, there is a good chance that the bill will not be challenged.

With the boom in cryptos and Bitcoin, especially in 2020, the issue of regulations has come back to the forefront for governments. Today, this is the main threat to the future of cryptocurrencies.

Moreover, this reflection is being carried out in parallel with the creation of a national electronic currency in many countries, such as the e-dollar, e-euro, e-pound, etc. However, in this context, some governments would see the banning of cryptos as a way of ensuring the success of their national electronic money. It would be a way for them to keep their hands on it since central banks would remain in control of these currencies.

“Hasty and bad regulations will set India back 10 years. Good regulations will catapult India to the top of this technology” said Nischal Shetty, CEO of the Indian exchange WazirX.

For many, this is why India wants to ban cryptos. Thus, according to Nischal Shetty, CEO of the Indian exchange WazirX, criticized the government’s announcement on Twitter. For him, the government’s objective is to clear the way for the arrival of their centralized national electronic currency. This is a major challenge in a country that is very open to cryptocurrencies. By taking this step aside, India would become the first country in the world to ban cryptos. It would then lose the lead it has gained in the field of cryptos compared with other countries.