Indian lawmakers will provide a transition period if a proposed ban on cryptocurrency usage is passed, as reported by Bloomberg. Crypto holders in the country will be given a transition period of 3-6 months to exit their holdings. Those who continue to hold the digital assets after the proposed window frame will likely see their investments liquidated, according to an anonymous government official.
Indian Regulators Intends Crypto Ban, Embraces Blockchain
The proposed cryptocurrency bill is set to be introduced in the current parliamentary session via the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. The proposed regulation includes that cryptocurrency usage in all forms will be banned including prohibition in transacting on foreign exchanges. The bill is also expected to provide a framework for the country’s central bank to issue its own digital currency.
Even though the ban hinders the usage of cryptocurrency, it is open to adopting the underlying blockchain technology. A section of the bill read:
“To create a facilitative framework for creation of the official digital currency to be issued by the RBI. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
The official earlier cited that India’s new law will be based on China’s regulatory regime, which has effectively banned the trading and usage of cryptocurrency.
Earlier, Finance Minister Nirmala Sitaraman answered questions on cryptocurrencies and CBDC, stated:
“Given the risks associated with virtual currencies (VCs), including Bitcoins, Reserve Bank of India (RBI), vide circular dated April 6, 2018, had advised all the entities regulated by it not to deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs.”
Moreover, the Indian government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.
LuLu Exchange Partners with Indian Federal Bank
Meanwhile, Abu Dhabi’s leading financial services provider LuLu Exchange has partnered with an Indian private sector financial institution Federal Bank. Through RippleNet Cloud, cross-border transactions into India will be made through LuLu Exchange’s 76 branches in the UAE.
Using RippleNet Cloud, LuLu Exchange can send and receive payments between banks on RippleNet with an easy integration to process cross-border payments instantly. The network is considered reliable and cost-effective as it is based entirely on the cloud.
Given the bill does get approved, India can adopt regulated cross-border payment systems, being the country’s one of the biggest remittance corridors in the world.