India is reportedly considering a ban on cryptocurrencies.
According to Cointelegraph, an unverified document published by tech lawyer Varun Sethi has been making the rounds on social media, showcasing a draft bill entitled “Banning of Cryptocurrency & Regulation of Official Digital Currencies.”
The proposal details several points, including that cryptocurrencies be defined as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value.” The definition further notes such currencies’ use in exchange, as a store of account or value, and including their use in financial transactions as well as investment schemes.
It goes on to explain that a “Digital Rupee” — which will be issued by the Reserve Bank of India (RBI) — would instead be approved as legal tender, while all currencies that fit the aforementioned definition would be prohibited.
“No person shall mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in the territory of India,” the document states.
However, the ban does not apply to anyone using distributed ledger technologies (DLT) or other related technologies for experiments or research, including within educational contexts, as long as cryptos are not being used for payments. The ban would also not apply to the use for creating a network that delivers financial or other services, or for other means of value creation.
The proposed penalty for violating the ban would be a fine or up to 10 years’ imprisonment, or both.
The news comes after reports that RBI has been developing a blockchain platform for banking in its R&D branch. However, RBI has denied it had any involvement in the proposed legislation.
In addition, Facebook has reportedly decided not to apply for RBI approval for its upcoming Libra token because of the country’s rumored ban on cryptocurrencies.