In a surprise move late Tuesday, India’s government announced it will present a law to prohibit private cryptocurrencies and establish a framework for a central bank-backed digital currency.
The new measure “seeks to ban all private cryptocurrencies in India,” according to the Lok Sabha, and follows Prime Minister Narendra Modi’s warning last week that Bitcoin poses a danger to younger generations and might “spoil our kids” if it falls into “the wrong hands.”
After China declared all cryptocurrency transactions illegal in September, this is the latest such measure by a major rising nation.
According to Chainalysis analysis, India’s cryptocurrency industry has grown by more than 600 percent since the country’s Supreme Court overturned a prior prohibition in April last year.
Cryptocurrencies are expected to be owned by between 15 and 100 million individuals in Asia’s third-largest economy, with total holdings in the billions of dollars.
Their investments are now in a precarious position.
India’s central bank stated in June that it is preparing to launch its own digital currency by the end of the year, while also warning that private cryptocurrencies such as Bitcoin, Ethereum, and others raise “severe problems.”
According to the parliament’s bulletin of impending business, the bill would allow for certain exclusions to encourage bitcoin technology, but no additional information regarding the proposed law has been disclosed.
Bitcoin’s market price remained unaltered, rising 2.0 percent in Tuesday’s transaction.