[2021-03-15] [Reuters] India to propose cryptocurrency ban, penalising miners

[Vishnu.Reang]

https://www.reuters.com/article/us-india-cryptocurrency-ban-idUSKBN2B60R0

India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets, a senior government official told Reuters in a potential blow to millions of investors piling into the red-hot asset class.

The bill, one of the world’s strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading and transferring crypto-assets, said the official, who has direct knowledge of the plan.

The cryptocurrency users were recently hoping that the government may go easy on Bitcoin, since the finance minister had issued some vague statements hinting that there will be no blanket ban. But it looks as if the minister was just trying to fool the Bitcoin users until the regional elections are completed (elections are scheduled for next month). Now it is up to the users to decide what action they need to take during the elections.

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[newwest]

India has been more on the denial side and not being positive as far as have read on internet. Also, they might want to bring their own currency and due to which do not want other currency to get promoted so this could be the reason of the ban they want to impose it.

[Lucius]

I have to admit that it is really very confusing what exactly is happening in India when it comes to cryptocurrencies, completely contradictory news comes every day. Most people don’t have a good opinion of politicians, but what’s going on in India is really a circus, like kids in kindergarten are playing with law-making, which to me seems like those who are supposed to make decisions don’t really know what they discuss at all.

Vishnu.Reang, if memory serves me well, you have repeatedly written that the crypto community in India is very small and has almost no influence on politics - so I think you should get organized and start fighting for your rights. I think all these proposals that are emerging actually stem from the ignorance of politicians who consider cryptocurrencies a threat - and has their legalization in countries like Germany or Japan had any detrimental consequences for those countries financial systems?

[Vishnu.Reang]

Vishnu.Reang, if memory serves me well, you have repeatedly written that the crypto community in India is very small and has almost no influence on politics - so I think you should get organized and start fighting for your rights. I think all these proposals that are emerging actually stem from the ignorance of politicians who consider cryptocurrencies a threat - and has their legalization in countries like Germany or Japan had any detrimental consequences for those countries financial systems?

This is what everyone thought. Since the cryptocurrency trading is mostly conducted through P2P platforms in India, it is very difficult to measure the exact number of users. But when the government first proposed the blanket ban a few months back, huge number of people participated in the social media campaign against it. Some of the government ministers also noticed the campaign and adopted a conciliatory stance. But the finance minister was very adamant and she is going ahead with her plans to impose a blanket ban.

And to the second part of your question, whether legalizing cryptocurrency is going to have any detrimental impact on the economy or not - the government simply doesn't care. Their concern is not regarding any impact on the economy. The minister is explicitly stating that she will not allow any cryptocurrency that was "invented outside India". It is very clear now. Cryptos such as Bitcoin and ETH will be banned. After this, the businessmen who are close to the ruling party such as Ambani and Adani will come up with their "Indian" version of the cryptocurrency. The government thinks that if Bitcoin and other established cryptocurrencies are banned, they can fill the vacuum with their own cryptos.

[Kakmakr]

There are so much FUD doing the rounds now.... because 5 hours ago... this was posted : https://cointelegraph.com/news/india-to-have-a-window-for-bitcoin-says-minister-amid-crypto-ban-fud

I quote : " In a Saturday interview with India Today, Sitharaman emphasized that the ministry does not plan to shut off Indian innovations associated with Bitcoin (BTC) and its underlying blockchain technology. " - Minister of finance of India

We know most of this is political games to garner votes for their election ....so mixed messages will be rife during these times. We also know the India government is very complex. (One says this and the other something totally different)  

Let's not over react on Internet FUD...... and just go on as normal.  

[Betwrong]

A government panel in 2019 recommended jail of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies.

And today is ...? 2021, right. I'm pretty sure we'll read in 2023 something like "a bill to criminalize cryptocurrencies was proposed in 2021 ..." And, btw, was if for the first time, in 2019, when the Indian government almost banned crypto? No. It's a never ending story, and I feel like we'll always have it with us, "India is going to ban cryptocurrency".

[Sithara007]

A government panel in 2019 recommended jail of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies.

And today is ...? 2021, right. I'm pretty sure we'll read in 2023 something like "a bill to criminalize cryptocurrencies was proposed in 2021 ..." And, btw, was if for the first time, in 2019, when the Indian government almost banned crypto? No. It's a never ending story, and I feel like we'll always have it with us, "India is going to ban cryptocurrency".

This time it is different from what we have in 2019, because the bill is already listed in the parliament website. The government seems to be delaying it slightly, so that the discussion will be taken up only after state elections (scheduled for next month) are over. Two of the southern states (Kerala and Tamil Nadu) are going to the elections and there are large numbers of cryptocurrency users in these states. I have talked to some of my friends from these regions and they are very angry with the government decision. All of them will be voting against the ruling party, due to this issue.

[cr1776]

As Lucius said, it is important to stand up for bitcoin.  It has great technical value and great societal value in that it puts controls on governments.  Likely this is why India and the Biden admin (among many others) don't like it.  When governments don't trust (and don't fear) the people, that is the doorstep to tyranny.  The rulers in India (and now in the US and elsewhere) don't value liberty, the value control to enhance their own power. 

[Lucius]

This is what everyone thought. Since the cryptocurrency trading is mostly conducted through P2P platforms in India, it is very difficult to measure the exact number of users.

According to some data in India there could be about 8 million of those who at least have accounts on one of the crypto exchanges - you will know better, but given the total population of almost 1.4 billion even that number is very small. Yet data from your crypto exchange shows strong growth in new users, and I think that scares your government.

In India, despite government threats of a ban, transaction volumes are swelling and 8 million investors now hold 100 billion rupees ($1.4 billion) in crypto-investments, according to industry estimates. No official data is available. User registrations and money inflows at local crypto-exchange Bitbns are up 30-fold from a year ago, said Gaurav Dahake, its chief executive. Unocoin, one of India’s oldest exchanges, added 20,000 users in January and February, despite worries of a ban.
ZebPay “did as much volume per day in February 2021 as we did in all of February 2020,” said Vikram Rangala, the exchange’s chief marketing officer.

And to the second part of your question, whether legalizing cryptocurrency is going to have any detrimental impact on the economy or not - the government simply doesn't care. Their concern is not regarding any impact on the economy. The minister is explicitly stating that she will not allow any cryptocurrency that was "invented outside India".

Similar to what China did a few years ago, but with the difference that it still does not penalize possession or crypto mining. India actually wants to have complete control over its financial system and not allow any alternatives, which is just an indication of the degree of democracy that exists in that country. Still, we should wait to see if these laws will pass or will remain a dead letter on paper as before.

[Slow death]

There are so much FUD doing the rounds now.... because 5 hours ago... this was posted : https://cointelegraph.com/news/india-to-have-a-window-for-bitcoin-says-minister-amid-crypto-ban-fud

I quote : " In a Saturday interview with India Today, Sitharaman emphasized that the ministry does not plan to shut off Indian innovations associated with Bitcoin (BTC) and its underlying blockchain technology. " - Minister of finance of India

We know most of this is political games to garner votes for their election ....so mixed messages will be rife during these times. We also know the India government is very complex. (One says this and the other something totally different)  

Let's not over react on Internet FUD...... and just go on as normal.  

the government of india wants blockchain, but they want to ban bitcoin and altcoins but without that in the process of banning bitcoin and altcoins they do not ban the technologies that come from bitcoin or altcoins. I commented on this in the last post that the government of India is striving to have its own altcoin (its own digital currency) because they are a radical government that takes sovereignty issues very seriously and intend to have the greatest possible control over their people. but at the same time the government of india wants some technologies coming from bitcoin or altcoins


It is easy to understand government like that of India, for the government of India they must be thinking about the following: why should the people of India use something decentralized and created by anonymous people? this will hurt the country’s sovereignty, so they’re going to force their people to use the digital currency they’re going to create.

and in political terms no doubt that the government of india must be thinking that the more its people use cryptocurrencies that are decentralized the greater the risk that its people will start to demand that in their country government policies are more decentralized and transparent and start demanding more freedoms, and I doubt whether the government of India is willing to be more decentralized, to give greater freedoms to its people

[Vishnu.Reang]

This is what everyone thought. Since the cryptocurrency trading is mostly conducted through P2P platforms in India, it is very difficult to measure the exact number of users.

According to some data in India there could be about 8 million of those who at least have accounts on one of the crypto exchanges - you will know better, but given the total population of almost 1.4 billion even that number is very small. Yet data from your crypto exchange shows strong growth in new users, and I think that scares your government.

8 million is the number of users registered to various Indian based exchanges such as WazirX and ZebPay. As far as I know, the majority of the Indian users don't trust these local exchanges. They primarily use the P2P platforms and in some cases international exchanges. So that's why I said that the real number of cryptocurrency users in India is very difficult to estimate. But IMO, it should be much higher than 8 million. ZebPay recently stated that they have 3.5 million registered users in India. WazirX gave a figure of 1.75 million a few months back. The number of users registered with CoinDCX should also be in the low millions.

[bhatanagarntn]

https://www.reuters.com/article/us-india-cryptocurrency-ban-idUSKBN2B60R0

India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets, a senior government official told Reuters in a potential blow to millions of investors piling into the red-hot asset class.

The bill, one of the world’s strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading and transferring crypto-assets, said the official, who has direct knowledge of the plan.

The cryptocurrency users were recently hoping that the government may go easy on Bitcoin, since the finance minister had issued some vague statements hinting that there will be no blanket ban. But it looks as if the minister was just trying to fool the Bitcoin users until the regional elections are completed (elections are scheduled for next month). Now it is up to the users to decide what action they need to take during the elections.

Indian Government will never earn you though easy money methods

[Vishnu.Reang]

Indian Government will never earn you though easy money methods

They don't want Indians earning money directly from abroad. Previously they made it extremely difficult for freelancers to receive payments through PayPal from foreign employers. PayPal tried to negotiate with the government for some time, but in 2020 they closed down operations in India. The freelancers shifted to Bitcoin and Ethereum, because receiving payments was relatively easy. Obviously the government once again took notice of this. As per the government, if you want to earn money, then you need to do that through intermediaries decided by them. IT employees in India earn only 5% or 10% of what their counterparts in US or UK, because the government has imposed all sort of direct and indirect taxes on them.

Still, the major worry for the government is that if cryptocurrency becomes popular then people may lose their interest in artificially inflated assets such as equities and bonds. Also, unlike stock market, cryptocurrency market is outside their control. They can't manipulate it so that they can keep the investors under perpetual slavery.

[Betwrong]

A government panel in 2019 recommended jail of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies.

And today is ...? 2021, right. I'm pretty sure we'll read in 2023 something like "a bill to criminalize cryptocurrencies was proposed in 2021 ..." And, btw, was if for the first time, in 2019, when the Indian government almost banned crypto? No. It's a never ending story, and I feel like we'll always have it with us, "India is going to ban cryptocurrency".

This time it is different from what we have in 2019, because the bill is already listed in the parliament website. The government seems to be delaying it slightly, so that the discussion will be taken up only after state elections (scheduled for next month) are over. Two of the southern states (Kerala and Tamil Nadu) are going to the elections and there are large numbers of cryptocurrency users in these states. I have talked to some of my friends from these regions and they are very angry with the government decision. All of them will be voting against the ruling party, due to this issue.

Do you really think the bill will pass? There are over eight million investors in cryptocurrencies in India, and I'm sure many of  them are not regular voters, but the very people who decide whether the proposed bill becomes law. It remains to be seen, of course, but I don't think they will be chopping the branch they are sitting on.

[Lucius]

There are over eight million investors in cryptocurrencies in India, and I'm sure many of  them are not regular voters, but the very people who decide whether the proposed bill becomes law.

You forget that India is a country with almost 1.4 billion people, and what in that context is 8 million, or as we have already concluded probably more people who own or trade cryptocurrencies? If it were about 14 million, it would still be only 1% of the total population - they do not pose a danger to politicians, especially if they are not united and begin to become politically active.

The whole thing is actually on the Indian crypto community, they have to exert as much pressure on the authorities as possible and show that they oppose such a law. It may not work, but if they do not raise their voice, they will give legitimacy to government actions.

There is a saying that says “Bad government is chosen by good people who stay at home”, of course in the context of the election process.

[Vishnu.Reang]

^^^ Indian users are not sitting idle. For the last two months, they have been involved in a massive social media campaign against the proposed ban. Also, there is another campaign in which cryptocurrency users have sent emails and letters to the parliamentarians who represent them, urging not to ban cryptocurrency. Anyway, state elections are scheduled for next month, and at least from my part I have decided to use my vote wisely.

[Betwrong]

There are over eight million investors in cryptocurrencies in India, and I'm sure many of  them are not regular voters, but the very people who decide whether the proposed bill becomes law.

You forget that India is a country with almost 1.4 billion people, and what in that context is 8 million, or as we have already concluded probably more people who own or trade cryptocurrencies? If it were about 14 million, it would still be only 1% of the total population - they do not pose a danger to politicians, especially if they are not united and begin to become politically active.

The whole thing is actually on the Indian crypto community, they have to exert as much pressure on the authorities as possible and show that they oppose such a law. It may not work, but if they do not raise their voice, they will give legitimacy to government actions.

There is a saying that says “Bad government is chosen by good people who stay at home”, of course in the context of the election process.

I believe they are not just 8 million of regular people, some of them are politicians themselves. If it were a standoff between crypto holders and government, I wouldn't bet much on the holders, but it's not that simple. We don't know how many influential people in India own Bitcoin and don't want to part with it. It is very likely that at this point most of them are Bitcoin holders.

[Sithara007]

I believe they are not just 8 million of regular people, some of them are politicians themselves. If it were a standoff between crypto holders and government, I wouldn't bet much on the holders, but it's not that simple. We don't know how many influential people in India own Bitcoin and don't want to part with it. It is very likely that at this point most of them are Bitcoin holders.

Being a resident of India, I would say that even of politicians and other powerful people own Bitcoins, the proposed ban will have a limited impact on them. These people can easily trade in cryptocurrency, through their friends who reside in foreign nations. Even during the demonetization campaign of 2016, more than 99% of the demonetized banknotes managed to find it's way to the bank. So the large holders know how to get around these issues. Only the ordinary users who don't have access to such proxies will be in trouble.

[acquafredda]

I believe they are not just 8 million of regular people, some of them are politicians themselves. If it were a standoff between crypto holders and government, I wouldn't bet much on the holders, but it's not that simple. We don't know how many influential people in India own Bitcoin and don't want to part with it. It is very likely that at this point most of them are Bitcoin holders.

Being a resident of India, I would say that even of politicians and other powerful people own Bitcoins, the proposed ban will have a limited impact on them. These people can easily trade in cryptocurrency, through their friends who reside in foreign nations. Even during the demonetization campaign of 2016, more than 99% of the demonetized banknotes managed to find it's way to the bank. So the large holders know how to get around these issues. Only the ordinary users who don't have access to such proxies will be in trouble.

Put your money in bitcoin and keep control of the keys: if things would go bad in your country consider to leave it for good. I know it can be hard to leave your roots behind you but, owning BTC, I would be open to basically anything.

[Betwrong]

I believe they are not just 8 million of regular people, some of them are politicians themselves. If it were a standoff between crypto holders and government, I wouldn't bet much on the holders, but it's not that simple. We don't know how many influential people in India own Bitcoin and don't want to part with it. It is very likely that at this point most of them are Bitcoin holders.

Being a resident of India, I would say that even of politicians and other powerful people own Bitcoins, the proposed ban will have a limited impact on them. These people can easily trade in cryptocurrency, through their friends who reside in foreign nations. Even during the demonetization campaign of 2016, more than 99% of the demonetized banknotes managed to find it's way to the bank. So the large holders know how to get around these issues. Only the ordinary users who don't have access to such proxies will be in trouble.

I understand that technically they can pass a law, which they know how to circumvent, while ordinary people will be affected to the fullest. What I don't understand is why do they need that? Circumventing a law is kind of illegal, right? Why would Indian Government want to make criminals out of themselves, and what would they gain from banning crypto for regular folks?