India's agenda to ban private digital currencies and provide a framework for its own central bank digital currency has caused alarm, being called "one of the worlds strictest policies against cryptocurrencies" and calls that India is going to "miss the bus" on the opportunities posted by digital assets. Under the proposed Bill, anyone trading or even holding digital assets may find themselves subject to fines, perhaps even jail terms.
While further details have not been shared, a government official is now walking back earlier comments to reassure digital asset users that "the government was not going to block all options regarding cryptocurrency" and that experimentation with digital assets is likely to remain acceptable.
Finance Minister, Nirmala Sitharaman commented:
We are very clear that we are not shuttling all options off. We will allow a certain amount of window for people to use, so that experiments in blockchain, bitcoin, whatever you may want to call it, the cryptocurrency experiments and fintech which depends on such experiments will have that window of element for them; they are not going to shut it all off.
While hesitant on digital currencies, the Indian government sought to clarify its positive intentions for Blockchain technology.
The Finance minister added that:
On fintech, on blockchain, there is a lot of work going on in India and we would certainly encourage them.
It is unclear what holdings, individuals or companies will be inside or outside the ban's 'window'. If the bill passes any individuals trading or holding digital assets in India will need to actively review the scope of the law as the 6 month clock will begin for those captured to liquidate their assets.
The Indian government's approach of "blockchain not Bitcoin" remains one of the most skeptical approaches of a democratic government and it remains to be seen whether it is informed by a lack of understanding, or a fear of disruption to monetary sovereignty, given the popularity of electronic payments in a country which is still heavily cash dependent.