India plans to pass a new law banning cryptocurrency trading. The bill is expected to be discussed in the Federal Cabinet of Ministers before being sent to Parliament.
The federal government intends to promote blockchain - the technology behind cryptocurrencies - but has no interest in digital currency trading. The Indian Central Bank banned crypto transactions in 2018 after several cases of fraud following the sudden decision by the Indian government to demonetize 500 and 1,000 rupee notes. Crypto exchanges responded with a Supreme Court lawsuit in September and won a grace period in March 2020.
The court win has sparked a nearly 450 percent surge in trading in just two months since March, according to TechSci research. Bitcoin market Paxful reported 883% growth between January and May 2020 from about $ 2.2 million to $ 22.1 million.WazirX, the Mumbai digital currency exchange, grew 400% in March 2020 and 270% in April 2020, according to TechSci.
India's decision will be critical as more Asian countries weigh the pros and cons of virtual currencies. China recently allowed bitcoin trading as virtual property rather than fiat money. He also plans to create his own digital currency. Singapore and South Korea also regulate crypto trading.
The renewal of the ban could affect over 1.7 million Indians who trade digital assets and a growing number of companies building crypto trading platforms. The ban will also affect companies such as Singapore-based CoinSwitch, which has 200,000 users since it began operations in India in June. According to Chief Executive Officer Ashish Singal, the trading volume was in the region of $ 200-300 million.