The world's toughest regulatory framework on cryptocurrencies is about to be enacted

Uncertainty around cryptocurrencies in India continues to loom as the government proposes a new law that will ban this new asset class. 

The newest ban on crypto

Indian' lawmakers previously called for banning privacy-centric cryptocurrencies while building a framework for an official digital currency in January. This will impact Bitcoin, Ethereum, Dogecoin, and other crypto asset investors in the country. 

A senior government official in India recently revealed to Reuters that the country would enact a law to ban cryptocurrencies and find anyone in the country that trades or holds them. The bill does not only propose strict sanctions but at least it would give holders of digital assets up to six months to liquidate them. 

The bill's contents have not been made public, but government officials are confident of getting it enacted into law as Prime Minister Narendra Modi holds a majority in parliament.

Although a senior government official noted that cryptocurrencies would be banned, blockchain technology would be promoted. 

If the proposed bill gains the majority vote, India would be the first major economy to declare the holding of digital assets illegal. China, one of the world's largest economies, also has strict crypto regulations, as it is not recognized as a legal tender. However, the country does not penalize the possession of cryptocurrencies. 

Speaking at the India Today Conclave South on Sunday, Finance Minister Nirmala Sitharaman said that the government is not shutting all windows for cryptocurrencies. Sitharaman explained: 

My view on this is that of course the Supreme Court had commented on cryptocurrency, and while the RBI may take a call on official cryptocurrency but from our side, we are very clear that we are not shutting off all options.

The Finance Minister recognizes that fintech continues to be an area where India has an advantage and would continue to encourage work surrounding fintech and blockchain. 

India is not the only one 

While the acceptance of cryptocurrencies continues to grow in the United States, some other countries crave down on this new asset class. For instance, Nigeria also issued a ban on virtual assets. 

On February 5, the Central Bank of Nigeria (CBN) instructed commercial banks and financial institutions to close accounts that have been transacting with cryptocurrency exchanges. The CBN required banks to identify "persons and entities" operating digital assets within their systems. 

While banks have closed accounts and owners have withdrawn their funds, users have moved to peer-to-peer trading platforms instead, which is unlikely to impact cryptocurrency growth. 

Bolivia is another of the few countries where cryptocurrencies are completely banned. According to the authorities, the ban was enacted to protect their citizens from Ponzi and pyramid schemes. The only currencies that are legal in the country are those that are issued and controlled by the government. 

This law has not been overturned despite many attempts for pushback on the legislation.

Cryptocurrencies like Bitcoin and Ethereum are also completely illegal in the European country of North Macedonia. In Morocco, any involvement with cryptos could result in fines or even jail time, depending on the severity.