Recall that we reported in our recent publication that India had set in motion various policies to prohibit all crypto-related transactions in the country. Meanwhile, the government will soon announce a new plan on the outright ban of cryptocurrencies in India. In 2018, the government set up a panel to look into the crypto market and prohibit holding digital currencies.

The committee recommended a 10-year jail term for any individual or firm that holds cryptocurrencies. After that, the panel added that an alternative to the cryptocurrencies in the form of a digital version of the government-backed money should be introduced.

The Indian government will also ban holding cryptocurrencies in the traditional sector

India local media recently revealed that the regulatory authorities were on track to prevent individuals and corporate organizations from sourced funds through IPO, from holding cryptocurrencies, or engaging in any crypto-related investments.

The report was corroborated by the Economic Times, which added that the India Securities Authorities have ordered that any individual or company that wants to raise funds through IPO must first steer clear of any crypto-related holdings.

Though the regulators have not officially announced the order and the details, insiders have revealed that the government has concluded plans to inform all stakeholders of both IPO and cryptocurrencies of the order. The circular will first be sent to banks, securities lawyers, stockbrokers, among others.

According to Madesh Singhi, an investment banker, this development is one among several policies laid down by the Indian government to ensure that investors are entirely protected against unnecessary risks. The government is taking these steps to prevent companies listed on the exchanges from diverting investors’ money to highly risky assets.

India Insists on Outright Ban of Cryptocurrencies

The bill seeking the banning of crypto-related transactions will soon be presented for a debate at the parliament. The said bill dubbed “The Cryptocurrency Control of Digital Currencies” highlights the regulator’s move to prohibit the holding of cryptocurrencies in India. Also, the government is planning to announce the Central Bank Digital Currency (CBDC), which will come into being after discussions with stakeholders.

Meanwhile, the lawmakers are still on recess, which will end on March 7. Consequently, the passage of the bill may be delayed until April. Some analysts think that the government can bypass the parliament and pass the bill into law by relying on the Ordinance.

Looking from the Ordinance viewpoint, the president can pass the bill into law, bypassing the lawmakers. Some observers have said that using the Ordinance option is better, especially when the government is eager to see the implementation come into force as soon as possible.

No matter how urgent the government wants to bill to be passed, holders of cryptocurrencies will still be given the grace of six months or less for them to liquidate their cryptocurrencies. This will prevent a haphazard transition from the crypto period to a post-crypto period. Likewise, the grace will enable companies holding cryptocurrencies to adjust their accounts and prepare for the implementation of the new law.