The Reserve Bank of India (RBI) stated that cryptocurrencies pose a threat to the country’s financial stability. According to Reuters, there are estimated to be 15-20 million cryptocurrency investors in India, holding approximately 400 billion rupees ($5.39 billion USD) worth of digital assets.
“The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” will seek to ban private cryptocurrencies in India, and ease the development of RBI’s official cryptocurrency – the new Central Bank Digital Currency (CBDC).
The regulation is slated to be introduced during the Winter Session, starting from the 29th of November.
After the proposal’s release, the prices of top cryptocurrencies quickly plummeted by 10-20%. Tether dropped by almost 18%, while Bitcoin fell by around 17%, and Ethereum by 15%.
India’s prime minister, Narendra Modi, recently discussed cryptocurrencies with higher officials in the country, saying that the world needs to ensure cryptocurrency does not “end up in the wrong hands.”
So far, the government has been discouraging crypto trade by enforcing heavy taxation.
On The Flipside
- There will allegedly be some exceptions to the ban to “promote the underlying technology of cryptocurrency and its uses.”
Why You Should Care?
If more countries begin to ban or restrict crypto, further price crashes could occur.