As countries from all around the world work hard to regulate the use of cryptocurrencies, Indian lawmakers just proposed a bill that will make crypto ownership completely illegal. The proposed prison sentence for people caught holding a cryptocurrency is of up to 10 years.
What is particularly interesting with the bill is that India is also planning right now to launch a state-backed cryptocurrency, known as Digital Rupee. Such a decision sounds counterintuitive.
The proposed 10 year prison sentence is aimed at people that generate, sell, hold, dispose, transfer, deal, issue or mine cryptocurrencies, both indirectly and directly. The sentences are said to be non-bailable. In this bill it is also stated that the crypto profits of an individual will be used against them. 4 criteria will be taken into account as sentences are handed out:
- Harm caused to the system
- Repetitive offence nature
All the fines are levied by courts and can be 3 times as large as the profit that was made by the holder. According to BloombergQuint:
The penalty imposed on the accused, according to the bills, shall be either thrice the loss caused to the system, or three-fold the gains made by him/her, whichever is higher. If the loss or grain can’t be reasonably determined, the maximum fine that can be imposed may be notified by the government.
This proposed bill states that people that hold Bitcoin now or other cryptocurrencies need to declare this and get rid of the crypto in 90 days. Obviously, the Digital Rupee is not going to be affected by this stringent law.
The bill did note that central government officials will talk with the RBI (Reserve Bank of India) in order to launch the new cryptocurrency, the Digital Rupee. When approved, it will be a huge turn done by a bank that was bearish on Bitcoin, blockchain and cryptocurrency.
In India, there were numerous talks about banning cryptocurrencies since the government anticipates unregulated Bitcoin to negatively affect the economy. We also saw a government official talking about Bitcoin and saying it is just a Ponzi scheme that should be removed from economic life.
In the event that this bill does go ahead, it is a certainty that people will start to use the popular cryptocurrencies less than now. However, this does not mean they cannot use the coins that are privacy-centric, like Zcash and Monero. Even so, the number of Indian citizens that hold Bitcoin right now is very high. Millions might be affected by the bill.