India has been known for being one of the most crypto-unfriendly nations around the world. However, if the new rumors are correct — this intolerance for digital currencies is about to go to an entirely new level.
Yesterday, June 7th, crypto users in India received horrifying news, which was originally reported by Bloomberg Quint. The news claims that the country might be planning to jail anyone who decides to deal with digital currencies in India. The supposed ‘draft bill’ says that anyone with any connection to cryptos — including mining, generating, issuing, selling, holding, transferring, or disposing of them — could go to jail for one to ten years.
Indian crypto ban to take the next step
The country already has a standing crypto ban, and the new one will only increase it — and the consequences of violating it. The supposed bill also states that offenses will be non-bailable and cognizable. Also, if any conduct is punishable under other laws, the new act will be taken in addition to such law, and not in derogation of it.
The new move appears to be extremely harsh. However, this might not be the end of cryptocurrencies in India, as the RBI allegedly plans to develop its own coin, a ‘Digital Rupee,’ which would replace Bitcoin and altcoins.
Even if this appears to work in the RBI’s favor, the Reserve Bank strongly denies any connection or involvement in the new bans on digital currencies. Further, the bank recently announced that it is not even aware of any new bans being in development. In other words, the bank washes its hands of this, and they strongly claim to not forwarding any new draft bills from any financial regulators in the country. Also, the bank claims it has not even communicated to other financial regulators regarding such matters.
Due to such harsh denial, many believe that the bill is only a rumor and that it does not exist. While this is in no way a confirmation of it, the fact is that the RBI should be at least aware of such a bill, if it truly exists.
How might the ban impact the crypto space?
However, if the bill is actually real, it might represent a major blow to the crypto space, and particularly to the Bitcoin (BTC) ecosystem. India is one of the countries with the largest number of citizens in the world, and hundreds of millions of its people are unbanked and underbanked. Using cryptocurrencies could solve a great number of their financial problems.
There are also many who believe that BTC and the crypto space itself might not suffer from this at all, but that India’s people certainly will. Finally, there are even some who believe that the crypto space might somehow benefit from this. While it does sound contradictory, there are many who believe this.
One example is a well-known crypto investor, Barry Silbert, who thinks that the ban might have an opposite effect.
India ain't messing around. This will, of course, have the opposite of the desired effect on bitcoin awareness and interest in the country https://t.co/S7OehKgNS1
— Barry Silbert (@barrysilbert) June 7, 2019
According to him, introducing such a harsh ban might increase awareness of cryptocurrencies in the country, and even inspire many to start using them. This reaction might come due to the Streisand effect, and the theory that people of any nation might do anything in order to oppose government control.
A lot of others agree with this viewpoint, such as Michael Goldstein and Samson Mow, who see the ban — again, if it actually exists — as free advertisement for digital currencies in India. In that regard, yes, the crypto space might benefit from the ban. However, it is still unclear how are Indian citizens going to use cryptocurrencies without going to jail. Obviously, most of the news is currently based on rumor and speculation, and hopefully — some real, hard facts will emerge soon, and clarify the situation.