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India to ban cryptocurrencies, and allow investors to transition from their holdings: Report

There has been a lot of news going on about the ban of cryptocurrencies in India. While we should wait for official announcements, a report by Bloomberg Quint suggests that the Indian government will offer a transition period for crypto investors.

According to a senior finance minister, who in the condition of anonymity talked to the publication, since cryptocurrency isn’t backed by the Reserve Bank of India, “its usage in all forms will be banned through the new law that will be introduced in Parliament.

However, if you are a cryptocurrency investor, then you don’t have to panic sell immediately. That’s because the minister suggests that the ban won’t be applicable overnight and give some time to investors to get rid of their holdings. The transition period can be set between 3 to 6 months.

Of course, it remains to be seen how the ban takes place. Per CNBC-TV 18, reporter Timsy Jaipuria cites her sources and mentioned that the government will “spell out modalities of the proposed Indian cryptocurrency framework” soon. She also stated that only RBI-issued cryptocurrencies will be legally allowed.

The RBI first announced that cryptocurrencies aren’t a legal tender back in April 2019, and since then, the crypto and blockchain ecosystem in the country has been going up and down. The ban was overturned in March 2020 in a lawsuit in Supreme Court. However, this impending ban spells doom for crypto investors in India. While there’s no official way to verify the data, reports suggest that there are over one crore cryptocurrency investors in the subcontinent.

Interestingly, Twitter’s co-founder announced a Bitcoin endowment trust in partnership with Jay-Z. Dubbed Btrust, the foundation will fund Bitcoin development focusing on emerging markets such as India and Africa. While the entrepreneurs in the space do want the space to be regulated, an outright ban would push the subcontinent years behind countries across the globe, especially those that are embracing them.

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