The ban on Bitcoin and other cryptocurrencies in India will hurt nearly 5 million Indians. Several corporations and governments across the world are moving the financial services to the blockchain technology. However, India is risking by outlawing it.
There were widespread talks about the coming of Lakshmi, a digital token from the RBI which was supposed to be the Indian version of national cryptocurrency lot similar to Bitcoin. Policymakers in India have chosen to outlaw the crypto and putting those who are using them behind bars.
The draft bill of Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019, has called for a 10-year prison sentence for anyone who mines, generates, holds, disposes of, issues, sells, transfers, or deals in cryptocurrencies.
There is no safe harbor for people who have bought in to or dealt with the cryptocurrency in the past. The bill might not have a retrospective effect, but there is a growing concern about investors and traders about exiting from their positions in different cryptocurrencies. The bill does not provide for an opportunity to exit from their positions.
However, Section 26 of the Act provides some provision. “All is not lost. Section 26 of the Bill is a transitional provision. It states that within 90 days of the Act’s commencement, the concerned person who possesses cryptocurrency must declare and dispose them off.”
About 5 million Indians are currently holding the cryptocurrency. Some analysts are of the opinion that the arbitrary decision to criminalize the investment in digital tokens would destabilize the several crypto-related businesses which have been operating legitimately. This, in turn, would erode the wealth of millions.
If the bill would become a reality and come in to force, then India would be the first-ever country to ban an innovative technology like the cryptocurrency. Nearly 5 million Indians will have to simply dispose-off and lose all their ill wealth.
The 10-year prison sentence for dealing in cryptocurrencies is higher than the maximum punishment of seven years for money laundering.
The very important thing to note is that the 10-year prison sentence is more than the 7-years sentence for money laundering. However, the draft bill, according to several analysts, might not be passed in its present shape and form and might be modified after due debate on the probable implications. Taking the nature of the cryptocurrency into consideration, it might be difficult to track those who are holding and selling cryptocurrency.