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https://www.bloombergquint.com/bq-blue-exclusive/exclusive-india-proposes-10-year-jail-for-cryptocurrency-use-may-introduce-its-own-digital-currency

non paywalled here

https://pastebin.com/GVJUHFbb

Normally you'd dismiss this proposal out of hand a la Russia, but this is India, a country that was willing to buttfuck its very own poor until their entire digestive system collapsed in the name of driving them out of cash.

What do you reckon the odds are?

For now, it's just a proposal, but according to what the article says some very important state bodies stand behind this. I think the chances that this proposal passes is more then 50%, just because this is about India which is mostly negatively looking towards cryptocurrency. The fact that they want to make their own crypto just shows that problem is not in crypto, but in finding no way to control it.

Obviously they want to stop progress of cryptocurrency in all possible ways, and even with rather large prison sentences up to 10 years. I do not know if there is a political alternative which has a softer approach toward bitcoin, but if there is, then the only option for a change is in the next elections.

Indeed. Normally I'd dismiss it as typical crypto press horse shit but the types of people on that committee are those who make things happen.

India is also all too happy to come down as hard as possible on gold so there's a good chance crypto is already dead but doesn't know it yet in India. Ah well. Their loss.

This sucks, I too think there's a high chance that they will do it, judging by their history with gold, fiat and crypto. What's also bad is that a lot of other countries will take it as a signal and will do the same, this is generally how it often works. And I wonder what will Facebook and other companies who want to roll out their crypto will do - how will they ensure that it can't be used by people in India?
Also, how it will work for visitors? If I owe crypto, but don't take it with me, is it ok to them? Except crypto is just information, it can be in the cloud or in memory, so there might be some loopholes in their new law.

I don't think any other country looks to India on how to run an economy.

I don't know what goes on in the mind of the Indian authorities, but the mass wiping out of bank notes was an assault on millions of innocent people on the breadline. How any responsible and compassionate government could do that is beyond me.

I presume places like Facebook will simply bypass India and by extension the Indian government will impoverish its population even further. Just think about the potential remittances in future that may not reach them because of stuff like this.

It is really bad news for the Indian crypto users as even now Localbitcoins site have stopped the cash transaction and imposed the KYC policy which is why now all users have to give their documents to verify and now even they have taken consent confirmation of giving the users details to the government authority when ever asked. So now Indian users have to delete their account so that when the proposal of Jail for crypto users should not affect it.

Being an Indian citizen, this news is of real concern to me. In a developed country such as Australia or England, you can expect the Bitcoin user to be given a chance to prove his innocence. But that does not work here. Here the cops are the biggest criminals and just last month there was the news of a Bitcoin trader forced to commit suicide after blackmailing by one police officer. If this legislation is passed, then it is going to be a windfall for the cops.

The people from India should not just sit back and accept things like this from a corrupt government like that, they should use their vote in the next elections and get rid of these bad decision makers.

In any way, Bitcoin is unstoppable and you can still hide ownership of your bitcoins and then spend them online or in another country where they are Bitcoin friendly. I would hoard the coins and then take a Bitcoin holiday in another country and spend money like crazy... Fck them out of taxes, because they do not deserve the taxes on Bitcoin if they ban it.  8)

The next elections are scheduled for 2024.

But voting for another party is hardly going to bring any change. As far as I know, none of the political parties have supported the idea of legalizing Bitcoin in India. Also, Bitcoin users are not an important voting bloc in India. The most important bloc is composed of the rural farmers, and they voted en bloc for the ruling party during the last elections.

I thought the same thing, but unfortunately I doubt that the people of India will change the current Indian political scene. One of the biggest problems of the poor countries is it seems that the people do not understand that the wrong political decisions can harm the life of a people. In the case of India with the caste system and with religion they have become a great advantage for politicians to do as they please because they have a divided and somewhat submissive people to the government.

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in some time we will hear that this has been approved. as expected from india

Was unable to finish reading the article but I knew India is a country which has different ethic and belief (religious) long ago and the rules/regulations used a some certain states are not accept or allow in some other States which was also the reason why it hard for crypto currency to be legalized there. However, what I read acoupke of days back is that crypto trading, holding and selling is allow in India and there even a couple of months old exchange site (wazrix) which I think it from there.

Is there something I'm missing?

Nope. It's a proposal, nothing more. However what makes this stand out is the people who are proposing are influential and India's viciousness when it comes to screwing with the financial freedom of their people. It's extreme but the things they've already carried out are extreme.

Back in 2016, almost 90% of the fiat currency was made invalid and for many months after that the people faced extreme difficulty in making payments. The reason given was that the government want to encourage digital transactions and they want to punish the individuals who hold unaccounted money. Almost the entire population was affected by that measure and still the government was voted back to power (with an enlarged majority).

I think people do not just have to comply with the laws which limit fundamental human freedoms, and in this case even if you hold some crypto it is a criminal offense - even China does not have such strict laws. If the person is cautious and does not use any official channels for buying / selling crypto, I think it can stay under the radar of authority.


I've already asked a question about the existence of political alternatives, and if there is no real one, then people in India who want changes should take action in this matter. Is it possible that there are no young and educated people to launch a party that would be friendly toward cryptocurrency?

Indeed. Which is why I think this is much more credible than the average threat. They're just about mindless and nasty enough to do it. If that's what the people want to do to themselves then they're welcome to it.

A bit too much noise going on in the past few weeks/months re India and their goings on with crypto. What I'd really like to know about this so-called draft regulation is, who's behind it exactly?

You'd think it's at least got a shade of the central bank but RBI's response this week to a Rights to Information request flat out says they were never involved in it.

So it's just the mysterious government officials... so they're going to jail all their rich guys and Bollywood crypto influencers now?

The vast majority of the Indian population lives in urban slums and rural areas and most of them are ignorant about cryptocurrency. If the government labels Bitcoin as a currency of criminals and tax evaders, then these people will believe the government version without any reservation.

And secondly, I am not sure about the number of active Bitcoin users in India. A conservative estimate would be around 1 million. Out of that, the serious users may number around 100,000. Among this subgroup, I expect at least 80% to fall in line with the government directive and quit the cryptocurrency market. And what we can do with the remaining 20,000 individuals, in a country of 1.4 billion people?

I have seen various Indian people on social media say that they aren't aware of this news at all. They're either not following the right local news sources, or this whole story is bogus meant to drag the price down. We have seen various fake news attempts already to manipulate the price and it wouldn't suprise me if this fits in that category too.

Considering that the smart money isn't reacting to this I would say this story is bogus, or the market doesn't care about India, which would be a good outcome in case it turns out to be true. Time will tell.

There are two reasons why I believe that this news story is not fake. A few years back, RBI was quite serious about banning Bitcoin. At that point of time, some of the governmental advisers were in favor of this move and some others were opposed to it. Those who were opposed to it ultimately gained the upper hand and convinced the then RBI governor (Urjit Patel) that a ban can't be implemented. But even after that, there have been constant calls from the first camp to revise the policy.

Secondly, this news has appeared in some of the most reliable mainstream media outlets, such as Bloomberg and Money control (the latter is the number one financial website in India).

https://www.coindesk.com/reserve-bank-of-india-denies-involvement-in-draft-bill-to-ban-cryptocurrencies

The RBI is saying they know nothing about this at all. You'd expect them to have a teensy bit of input into something so fundamental. Then again nothing is surprising about politics.



No one care what India does. The only time news like this affects things is in regions with strong markets. India has never been one of those regions. There may be lots of people there. Hardly any of them have much to do with BTC.

India has the odds stacked against it when it comes to crypto, but that only makes it more likely for fud spreaders to exploit India's anti crypto attitude in order to have the price move down, which it didn't in this case. I want to see them either accept or reject it, and as long as that isn't the case I don't add much value to rumors.

I am not aware of Money Control's integrity when it comes to their publications, but Bloomberg has proven to not be a reliable news outlet at all. They have released negative news articles about Bitcoin in the past that turned out to be fake. They also seem to be anti Bitcoin, so it doesn't surprise me at all that they spread fake news.

For the past several days, I am trying to get the approximate number of Bitcoin users in India, but no reliable stats are available for the same. I found one Forbes article dated 2017, and it claims that there are some 1.5 million users in India:

https://www.forbes.com/sites/sindhujabalaji/2017/11/15/why-indias-bitcoin-scene-is-thriving-despite-a-cold-shoulder-from-the-central-bank/#30ca444b28cd

Since these figures are two years old, I expect that the numbers are higher now.

Even though it seems like a remote possibility if it had happened for the rest of the world, I think that you need to take any rumours coming from the Indian government or the RBI very seriously, given the fact that it was wiling to essentially through the entire nation into a cash crunch for a publicity stunt of "cracking down on corruption".

Besides, it wouldn't be surprising if some negative action is taken in terms of crypto restrictions occur in the near future. They've already driven out the majority of crypto exchanges from their country due to the RBI restrictions on banks, which isn't getting lifted any time soon. They've also shown no interest in a new regulatory framework, which means that this type of thing is inevitable.


The irony here  ::)

I watch some documentaries about India, and I have some idea how things work there. One of the big problems is education, some person (maybe the minister of education) say that India needs one new school every ten minutes, to educate all children - this is of course impossible. With less educated people, and a relatively poor infrastructure it's easier to manipulate people, especially if this involved a fear from ones who make laws.

You're probably right, it is difficult to imagine country with such huge number of people when whole Europe have around half of that number, and there is still no universal agreement how to deal with cryptocurrency. The things may not look good at this time for India, but there is always the possibility that all this remains only proposal.

I didn't noticed this news until today, when one of my friends informed me about this. I am really concerned now about my coins. Spoke to some friends and the majority were planning to sell the coins soon. Only a few are planning to hold on to them in case the government bans BTC. I haven't decided what to do about it yet... but for sure I am not going to break any law.

its not a law just yet it is one of the bills
but this is simply the oddest and craziest proposal that I have seen:
they want to punish people for HOLDING, possessing cryptocurrencies , not trading, not mining - just having
and it is a non-bailable , up to 10 years imprisonment ... if it passes it would be the most retarded law ever
I pity my Indian brothers, the country has tons of problems as it is and they do not want to have troubles for simply having coins in their wallets
well , another thing is how on Earth are they planning to enforce the law , as ridiculous as it is , it has to be enforced to work
you can't expect the police to run after people in e-cafes who just opened an online  bitcoin wallet or something

I think that even though it is possible to write this into legislation, it's still somewhat of a scare tactic from the government.

The fact is that when you pursue these draconian measures and regulations surrounding bitcoin, you'll find that if you want to have any kind of enforceability you'll need to invest millions of dollars into transaction tracking mechanisms, investigations, etc. They're still essentially relying on people to follow these laws, which in practice probably will not happen even if they were implemented.

It still baffles me why they would go to such lengths to try and ban bitcoin, as opposed to integrating it as a legitimate part of their economy instead.

actually , every single news outlet has published the same paragraph and people from India are saying its fake news
the thing is that this abstract is taken out of context and it describes only if bitcoin is used in certain illegal activities as described in subsections (which they do not show)
so , generally this sounds like fake news , probably this regulation will be less stringent as everyone is expecting
but only time will tell , we shall see very soon what it is in reality

I am from India, and I don't think that this is fake news. First of all, the government had earlier also tried to ban cryptocurrency. And secondly, this news was published in reputed sites and those who mentioned in this article have not denied it yet. But I have high hopes on the new financial minister. She is highly qualified and well educated.

the worst thing a government can do is:

• be really serious about doing something
• failing to do it

because it makes them look weak (which is a pretty accurate description of their regulatory capabilities vis a vis cryptocurrencies; weak)

it's highly likely that the main reason no government has implemented a serious ban is because the are afraid it won't work, and they have too much to lose in those circumstances


so, that's not a very good reason. let's take a look at your 2nd reason



all these so-called "reputed" news sites frequently back the government or corporate class' view of just about everything. So maybe the scare tactics are real, but the news is still (ugh) fake. A real report about something that's not going to happen is a real report, you're right about that, lol


The fact remains: no one, anywhere, has or will implement an effective ban. The governments appear to be "playing for time", as they say in sports commentary. Look what they've done with their time so far (10 whole years): a big, fat nothing

This news has attracted a lot of attention from mainstream media here in India. The social media is also very active regarding this topic. And the best thing is that 90% of those who commented are fiercely against any move to penalize the Bitcoin holders. But then, the current government is being run by some religious hardliners and just a few months back they had banned porn!!

now imagine if you pay for porn with bitcoin in India -its instant decapitation on the spot  ;D
well I have already posted this youtube link :
https://www.youtube.com/watch?v=PV-drIodJEQ
in this video a man is trying to explain that the paragraph in question doesn't explicitly ban bitcoin , but only describes penalties for certain cases of its use ( or misuse)
it can be money laundering or scamming , it is described in the subsections we do not see , so it is impossible to say anything before the whole bill is published

so there banning something that's already banned. Double banned! It's like something out of a tv commercial ::)

If India wishes to introduce its own cryptos they are better doing this the right way, perhaps regulation is what they need to be talking about and not jail time for using a competitors product.

The punishments they are proposing is laughable and hope this is a late April Fools joke. Honestly in this time and era trying to win customers with unfair competition or should I say blackmail is unacceptable !

To be fair, the argument for banning cryptocurrency use in India is too strong.

This has a lot to do with the history of Money Laundering and Tax evasion in India. Over the past decades tax evasion has been a huge issue in India. People simply do not declare real income. To do this, cash as a means of transaction used to be encouraged in India by small traders, real estate dealers etc in order to obfuscate the trail of money.

A lot of money pumped into Central Govt schemes used to find its way to middlemen through bribes. To rein this, a system of Direct Benefit Transfers was widely promoted by this Govt. This lead to reduction in the funds being funneled by middlemen. This is where the funds used in corrupt practices come into picture.
The demonetization that most people are crying about was in fact the time when cryptocurrency gained wide usage in India. It was sold by the early adopters as an easy option to convert undeclared cash into safe, untraceable value. Govt committees understand that cryptocurrency is an untraceable form of value. The immediate use case in India would be for corrupt practices like bribes and undisclosed income. They don't want to get into the nuances of having it declared and then tracking them. Banning seems to be the simplest way to go about it.

This will be really bad for enthusiasts like me.

Bitcoin was designed to support exactly this type of behaviour. You should sell your BTC if you don't like this state of affairs, you clearly didn't even understand what it was before you bought.

Your mindset is incompatible with the tool you are using. You can't buy an airplane, then go on to complain that you can't drive it on the highway or park it in your garage.

Indian lawmakers are a bunch of jokers and they have proved it many times in the past as well. The problem is that these buffoons don't understand the basics of cryptocurrency. They still think that it is possible to link a cryptocurrency wallet with an individual. They are overly dependent on their advisers, and the latter makes use of the former's ignorance to push forward their agenda.

I take it that you say so coming from the anti-taxation, anti-establishment school of thought. I don't have a problem with that as its debatable whether its a good thing or a bad thing. I think you have taken my "declare and track" statement to heart. I am obviously wrong to see that as an alternative. That was not my point though and i am quite sure that Bitcoin wasn't "designed" to support bribes and corruption.

If don't think this is the ONLY "State of Affairs" bitcoin is supposed to propagate. You should probably expand your horizons a bit. India has been a developing, over-populated country for several decades since its independence. The tendency to hoard ill-gotten cash has been the bane of development out here. From that viewpoint, the regulators/ Govt project cryptocurrency as simply another way of safely storing "Bribe money". The Govt. officials in India who amassed disproportionate assets had this "Swiss Bank" thing going on for the longest time.

Its a difficult problem to solve and a difficult propaganda to counter. Obviously not as simple as giving unsolicited advice about selling BTC. If you want to continue this discussion by doling out sermons from your high chair of libertarianism then you are welcome not to reply. If you can point out a way to better counter these obvious "perception issues" or know of an example where this was done then you are welcome Mr Banks.

yes it was, it was designed to engender outright financial independence. that includes people using Bitcoin to do immoral things, as well as the moral



no it's not, if everyone has a "swiss bank account" then no-one need pay money to corrupt officials to begin with

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it's very simple.

Bitcoin is code. The code does exactly what it does, nothing else. It enables complete financial independence. If you don't want that, you bought the wrong thing: do everyone a favour, sell

Yeah yeah. I should have known where this will go.. :( Not arguing with that.


Hmm. Everyone using BTC would mean putting public expenditure on a public blockchain. This would automatically result in accountability.

Yet, those with power will always find a way to get paid and they are inherently shielded by the nature of cryptocurrency.  So while bitcoin can solve the problem of Govt and Central Bank monopoly on the value of money, i think it creates additional problems when it comes to corruption. This is why it is easier to target it in a developing country like India.
But yes, targeting BTC for that is a typical diversionary tactic. Its not the tool but the intent of its use which is the problem here.


Mannnn! First, I don't really own that much. Second, I am not selling, no matter what you say..The discussion evolved and well, I concede this debate in your favor Banks.  Would you please get off that horse now?? ::)

sure, if any group is pooling money to subsidize something of which they have joint ownership, they would be wise to keep track of the transactions that take place in the pool



people in power can't misspend your money if you don't give it to them. so Bitcoin does solve that problem.

if you think that you will give your BTC to corrupt people if (when) they pressurize you, I reiterate: please sell to someone who won't give away their democratic rights to corrupt bullies

A lot of debate going on here in India about the options we have, in case the Indian government bans the possession of crypto-currency. One of the proposed solution is to have some individual or some organization based outside India to hold the coins for the users. In case the user want to convert the coins to fiat, he can ask that individual to do that and send the money to India as "gift".

But I do not see how it resolves the problem, your coins are still your coins, regardless of whether they are stored on your computer or they are located in another country. If you government know that you have BTC for example in Japan, will this prevent them from punishing you for possession of cryptocurrency?

Also this would be a great security risk for each user, "no private keys, no full control over your coins". So something like this would work only if you have  a very confidential person in other country, who can hold coins for you and sell / buy coins for you. That "gift" part is also not 100% clear, fiat is something that can be very successfully tracked, and if government find source of money it can block your bank account and send you to cold storage for 10 years.

The draft of new bill doesn't have punitive law for all type of holdings. It specifically mentioned punitive charges if cryptocurrencies are hold for any purpose mentioned under Section 8 of the new bill. So even though new bill comes to existence and trading of cryptocurrencies gets banned in India, Indians still have the options to hold crypto in their personal wallet and sell them via mediums like 'Currency Exchange' section on forum and receive money via PayPal. I don't think that would be considered as offence.

The answer why they want to do this is in your own thread title. May introduce own crypto hehehe.

I reckon the odds are high that they can create the law and pass it. However, the odds are low that they can enforce it.

I doubt whether they are going to introduce their own crypto. At the most, they will introduce a digital version of the national currency (Indian Rupee, INR) and name it something like the crypto Rupee or the digital Rupee. Since it is inferior to most of the decentralized cryptocurrencies which are currently circulating, they first need to take them out and make some space.

This is a gross oversimplification. That is not what happens when money changes hands due to "corrupt administration". It is not a case of "An individual" being forced/ pressurized. All such major scams are generally a mutual exchange between partners in cahoots.

The money that gets diverted is "Public Money". What suffers is Public Infrastructure, healthcare, education etc.

that's not what I meant though



that ^^^ is what I meant.


Don't give them money. They give it to their friends to conduct public projects, then both put some or most of the money in their pockets. They're corrupt.


Be sure to give your money to people who do spend your money on good things that benefit others, and there's no real way of pointing a finger at you saying you're the problem.

This can create some headache for both the Bitcoin users and the authorities.

Let's say I am holding BTC20. Since India has banned Bitcoins, I just send them to my friend, who issues me a bank cheque of a certain amount in return. My friend creates an exchange account in his name in Japan, and sell the coins for fiat currency. He deposits the fiat cash to his bank account. After a few days, I encash the bank cheque and withdraws the fiat to my bank account. How can the government prosecute me?

In my tax return, I will show the fiat amount as gift from my friend.

The plan to go after decentralized cryptos and make their own, reminds me of Venezuela. Their plan did not work out, and people did not end up using their digital currency. The economic situation in both countries is very different tough.

I cant  understand why this drastic proposal is needed. It seems that is completely irrational and maybe even fueled by fear. I dont know much about India ( I have been there once for few weeks) but it seemed that almost all transactions are done via cash. So I dont understand how cryptos could give such big negative impact to their economy to justify this abnormal law.

For Venezuela, apart from the target of getting additional funds, one of the intended purposes was to circumvent the sanctions and embargoes. And as far as I know, it worked to a certain extent. Russian shell companies located in Cryprus were able to transfer significant amounts of funds using the Venezuelan government crypto (Petro). I am not sure about the volumes, but the fact that Maduro has managed to cling on means that he has received significant funds from Russia.