India to propose cryptocurrency ban

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March 17 2021
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The price of bitcoin fell from its recent weekend highs as one of its largest potential markets, India, proposed strict new rules banning the digital asset.

Over the weekend in Australia, the price of bitcoin climbed 7 per cent to a record high of US$61,556, according to Coindesk, the same weekend that Biden’s US$1,400 (A$1,804) stimulus cheques reached American citizens.

However, the world’s largest and oldest digital currency fell to US$56,626 at the time of writing, down by 8 per cent from the weekend’s peak.

The dip followed a report that India would propose a law making it illegal to possess, trade or issue any cryptocurrency, which would cut off a massive market for the asset class.

According to a report by Reuters, India is set to implement one of the strictest policies against the cryptocurrency, as officials look to build a framework for their own digital currency.

Under the proposal, anyone who is caught trading or even holding the digital asset would face government fines.

The bill would give holders of cryptocurrencies up to six months to liquidate their holdings before facing penalties.

Despite the Indian government’s crackdown on the digital asset, BTC Markets CEO Caroline Bowler said the ban will not work.

“In our view, this ban won’t work in the long term and would be a step backwards after spearheading a ‘Digital India’ campaign, that included financial inclusion and mobile phone penetration as key initiatives,” Ms Bowler said.

“The thing with cryptocurrency is that while governments may try to ban it or try to contain it, the very decentralised nature of the technology somewhat prohibits that. The US tried it with prohibition, and now the ship has sailed on an outright ban under Joe Biden’s administration.”

Nigel Green, chief executive and founder of financial advisory group deVere, believes regulation for the digital asset class is likely as digital currencies grow to be larger than countries’ GDP.

“Whether crypto cynics like it or not, there’s no getting away from the fact that bitcoin is becoming an increasingly important part of the global financial system,” Mr Green said.

“The move towards digital currencies is going to increase — and at pace — over the next few years. This is why financial regulators must now make regulation of the crypto sector a major priority.

“With a growing dominance, bitcoin and other cryptocurrencies must be held to the same standards as the rest of the financial system with a robust, workable international framework.”

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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