It is no news that the Indian government is looking to ban cryptocurrencies from its country entirely. However, a new report sheds more light on the steps that it would take to ensure that its anti-crypto stance is absolute.
Crypto Ban is Extending to the Traditional Space Too
Recently, the Economic Times reported that the Indian government is getting ready to restrict companies and individuals listing Initial Public Offerings (IPOs) in the country from holding any cryptocurrencies. According to the report, the Securities and Exchange Board of India (SEBI), India’s securities regulator, will require that any entity looking to raise funds through an IPO in the country will have to divest themselves of all cryptocurrency holdings.
While the agency has yet to send any memo regarding the development, it is reportedly planning to contact all stakeholders in the IPO ecosystem about it. These include stockbrokers, merchant banks, securities lawyers, and more.
Mahesh Singhi, an executive at investment banking firm SInghi Advisors, told the Economic Times that the move is part of the Indian government’s mission to ensure optimal investor protection in the country. The government allegedly hopes that this restriction will prevent any publicly-listed firm – or its operators – to illegally move investors’ funds into a “speculative” and risky asset.
India’s Impatient Anti-Crypto Government
Currently, the Reserve Bank’s anti-crypto bill is heading for a presentation at the Rajya Sabha – India’s parliament’s upper house. Titled the “Cryptocurrency and Regulation of Official Digital Currency Bill,” it outlines the Reserve Bank’s plan to ban cryptocurrencies in India, while also laying down the groundwork for it to launch its Central Bank Digital Currency (CBDC) after a successful consultation.
However, the country’s parliament is currently amid a recess session and won’t be coming back till March 7. This essentially means the bill might not pass into law until mid-April. Looking to sidestep this, some have suggested that the government bypass the parliamentary approach using the “ordinance route.”
Essentially, an ordinance will let Indian President Ram Nath Kovind pass the crypto law without having to wait for parliament. As some insiders told CNBC TV-18 recently, there have been talks of the government taking this approach, essentially getting the anti-crypto bill to pass this month.
Whenever the ban does come into effect, industry insiders will still be given a transition period. Bloomberg reported earlier this month that the Indian Finance Ministry would allow three to six months for anyone holding cryptocurrencies in the country to liquidate their positions. This way, the country can move into a post-crypto era in an orderly manner and without panic.
At the same time, crypto companies looking to exit the market will also have enough time to get their affairs in order and leave.
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