The new tough crypto regulation is a part of a recently proposed draft bill called “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019,” according to a report by crypto news outlet The Block.
The regulation will reportedly relate to those who mine, hold, buy and sell cryptocurrencies, as well as those who deal with cryptocurrencies directly or indirectly in the country.
If passed, India’s bill will order cryptocurrency holders to declare their crypto assets within 90 days and to dispose the assets “in accordance with the prescription of central government,” the report notes. The bill includes a penalty system that reportedly envisions fines worth a three-fold amount from the “loss caused to the system” or from the gains of crypto holders, according to The Block.
Considered as “cognisable and non-bailable,” the offense can also lead to a 10-year jail sentence for those who break the new rules.
The new bill reportedly proposed the development of a new national cryptocurrency called the Digital Rupee, while India’s central bank, the Reserve Bank of India (RBI), reportedly postponed its plans to release a central bank digital currency (CBDC) in early 2019.
The first inter-ministerial consultations on the bill banning cryptocurrencies in India started in April 2019, when local news agencies reported about a new bill that intends to completely ban cryptocurrencies in the country.
On June 4, the RBI officially denied its involvement or knowledge of a draft government bill, claiming that the bank has had no communication with the central government about the new law and had not received a copy of the bill.