The government of India is bringing in new laws on digital currency, with the effect of banning cryptocurrency trading in the country, according to reports.
First reported in Bloomberg, the council of ministers is expected to discuss the measures in the coming weeks, ahead of referring the matter on to the Indian parliament. The legislation is set to be debated as part of the monsoon session in parliament, which commenced earlier this week, the first return to parliament since the pandemic began.
The announcement confirms previous reports from India, which had suggested the government was keen to legislate for a digital currency ban. However, legal and regulatory experts have suggested that the legislative process is likely to be a long one, with lawmakers expected to spend time fully considering all implications and the optimum structures of the laws.
The development will be a blow to the digital currency sector in India, which has already suffered from unclear laws. It comes as the latest twist in the story for digital currency traders in the country, after a previous de facto ban on trading was introduced by the Indian central bank.
The bank’s ban on digital currency businesses was effectively overturned in court, granting a short reprieve for the country’s fledgling digital currency and blockchain sectors. However, with the latest update, analysts have suggested the formal ban would spell an end to digital currency trading activity in India for the foreseeable future.
The policy would see India at odds with other regional governments, who have taken a more open approach to regulating and legislating their digital currency sectors.
Reports suggest the ban could be a precursor to India introducing their own digital currency in due course, amid a global race between central banks to develop and launch central bank digital currencies.