Culture 3 min read

New India Law Proposes Ten Years Jail Term For Using Cryptocurrency

Indian officials are now working on a bill that would criminalize using cryptocurrency in any transactions within the country.

Image Credit: Pixabay

Image Credit: Pixabay

Using cryptocurrency will soon be illegal in India.

According to “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019,” Indian residents who deal in cryptocurrency could receive as much as ten years jail time. The word “deal in” include activities such as mining, selling, transferring, disposing of as well as issuing.

Aside from criminalizing possession of cryptocurrencies, the bill also makes it a non-bailable offense. That means the police can’t release the offender on bail as a matter of right.

With that said, the Reserve Bank of India (RBI) claims it does not know about the proposed ban. Reports reveal that the RBI was neither aware of the legislative process, nor received a copy of the bill.

So, why did the Indian government decide to ban cryptocurrency use?

Using Cryptocurrency As An Instrument for Money Laundering

In 2019, Bitcoin ushered in the era of cryptocurrencies. Although various government enforcement agencies and tax authorities were debating how to handle the new development, one essential question remains.

Are cryptocurrencies legal or illegal?

The answer to this question varies based on the location. Cryptocurrencies are not issued, endorsed, or regulated by any central bank. Instead, experts create them through a computer-generated process called mining.

Since it does not exist in a physical form, users have to share cryptocurrencies through a peer-to-peer payment system. Not only is this a convenient way to conduct cross-border transactions with no exchange fees, but it also allows the users to remain anonymous.

As a result, countries are wary of its decentralized nature and volatility. Aside from threatening the current monetary system, cryptocurrencies also enable illicit activities such as money laundering and drug trafficking.

That’s why government bodies such as the Income Tax Department and the Central Board of Indirect Taxes and Customs in India have recommended banning the digital asset. After all, it’s already illegal in China, Russia, Vietnam, Bolivia, Columbia, and Ecuador to own cryptocurrencies.

Besides, India recently declared its intentions to produce its digital currency. So, the ban could easily be a move to ensure the decentralized cryptocurrencies does not compete.

According to an official who spoke anonymously to the press:

“A decision on the launch of Digital Rupee would be taken after consulting the Reserve Bank of India (RBI).”

The ban is coming 19 months after Prime Minister Narendra Modi established a panel to study how to regulate the cryptocurrency sector.

Read More: Indian Digital Marketing Budget to Surpass Print in 2019

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Sumbo Bello

Sumbo Bello is a creative writer who enjoys creating data-driven content for news sites. In his spare time, he plays basketball and listens to Coldplay.

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