India Sets to Ban Crypto While Developing a State Endorsed Coin

Cryptocurrency has split the world’s powers straight down the middle, and rightfully so. For the first time in modern history, people have a financial alternative to government-backed banks. 

Crypto takes the financial monopoly away from authorities, so when those authorities make moves to ban it, it’s going to cause an uproar. 

That’s exactly what’s happening in India right now as the government is moving to introduce a bill that’s going to make all activities related to private cryptocurrency illegal. 

These draconian measures are similar to China, except India is being much more extreme with the rules being introduced. China made the trading of crypto illegal, but you can still hold and possess it. 

This new bill in India sets to outlaw trading as well as possession. Not only that, but mining, issuing, transferring, and more. 

Not only are these measures authoritative and a slap in the face to Indian traders, but it’s also incredibly manipulative as the government’s reason for it is to introduce its own state-backed coin. 

India Wants the Blockchain Without the Currency

The Indian government wants to adopt blockchain technology for use while separating it completely from cryptocurrencies.

This was outlined in the government’s legislative plan that was released in January, where it outlines its intention to criminalize all possession and distribution of private cryptocurrency while also using blockchain technology to develop an official coin for the country. 

No matter what way you cut it, this isn’t a good look on the global stage. Either the Indian government is clamping down on something because it can’t control it, or it’s directly removing the coemption for its state-owned coin, giving the Indian government a crypto monopoly in the country. 

What India’s Legislation Means for Crypto

While there is no official information on the details surrounding the ban yet, it’s speculated that breaking this law is going to carry a maximum 10-year jail sentence. 

However, it’s hard to believe that a jail sentence is going to dissuade Indian crypto enthusiasts from staying active in the market. 

In a digital age like today, it’s easy to mask your online footprint. It’s possible and likely that the introduction of this ban is going to create an entirely new black market for crypto in India. One which may possibly see inflated prices compared to what coins are trading for on global brokers. 

Crypto Crash Incoming?

Another possible outcome of this scenario is that it triggers a chain reaction that causes cryptocurrencies to crash. 

It’s not presumptuous to assume that once the bill has been passed, Indian traders are going to be given a set amount of time to get rid of their crypto. Once that happens, there’s going to be a country-sized influx of traders selling on the market. 

It’s not too outrageous to suggest that this is going to create a massive bear signal, pushing the price of Bitcoin down, and therefore bringing the rest of crypto down with it. 

This crash isn’t going to last forever if it does happen, though. It’s likely going to be a several-week-long chain reaction by sellers to how many people are selling. 

If certain traders are unaware of what’s going on in India and they see a massive increase in selling activity, they’re going to follow suit, further pushing crypto down. As bulls come into the market to pick at the carcass, though, it shouldn’t take long for it to recover back to strength.