India’s central bank is very concerned about bitcoin, ethereum, and other digital currencies. So, in a wrong-headed attempt to curb fears, officials may implement draconian measures to stamp out the country’s decentralized finance market. Are they making a terrible move? Would the proposed regulations affect North American blockchain, crypto, and NFT markets? Let’s dive in.
India’s New Cryptocurrency Ban
The proposed Indian cryptocurrency law would confer a “general prohibition on all activities by any individual on mining, generating, holding, selling, (or) dealing” in digital currencies as a “medium of exchange, store of value, and a unit of account.”
Even more worrying is that as a “cognisable” offense, meaning suspected violators could be arrested without a warrant and held without bail. In addition to criminal charges, officials are also considering strict crypto advertising regulations.
If lawmakers ratify the statute, the Securities and Exchange Board of India (SEBI) would become the country’s crypto-asset regulator and enforcer.
How many people in the country may be negatively affected by the proposed regulation? Currently, about 15 to 20 million residents of India hold some crypto assets representing approximately 5.3 billion euros. Moreover, the southeast Asian stronghold has a burgeoning blockchain sector that could be chilled by the strict standards.
List of Countries that Have Effectively Banned Cryptocurrencies
- Algeria
- Bolivia
- China
- Colombia
- Egypt
- Indonesia
- Iran
- Iraq
- Nepal
- North Macedonia
- Turkey
- Vietnam
How Indian’s Crypto Ban Could Affect North American Companies and Investors
India’s Blockchain Industry May Tank
Prime Minister Narendra Modi’s administration has long made it clear that it’s pro-blockchain and anti-crypto. But if this crypto-transaction ban passes, it may hinder all blockchain initiatives because transaction fees will effectively become illegal, rendering the technology ineffectual.
Now May Be the Time To Move Things Around
Another thing crypto investors should understand about India’s proposed regulation is that self-custodial wallets are also on the chopping block. So if you have wallets linked to India, now may be the time to reconfigure your portfolio and move things around.
India’s Crypto Ban and North America
Will India’s crypto ban affect North Americans? It depends. If you have business or crypto investment ties to the area, you may want to start re-evaluating your positions. Similarly, if you’re on the verge of investing in an India-based blockchain startup or project, think thrice.
On a macro scale, it’s not great that one of the largest emerging world economies is bowing out of the blockchain market — but it’s also not a huge blow. Moreover, nothing is permanent. Lawmakers have the power to change statutes. If, a few years from now, Indian officials realize that they’ve hamstrung the country, they’ll likely revisit the issue.
Remember, though, that this law is only a proposal at the moment. Nobody has signed anything as of yet. That said, if you currently have token holdings linked to India, now may be the time to consult with a crypto lawyer or tax accountant about the best course of action.
The Kelly Law Firm works with international blockchain and cryptocurrency firms and funds on regulatory matters. We also consult with investors. If you’re searching for an attorney with knowledge of the global cryptocurrency landscape, let’s talk.
