Cryptocurrency ban will be a trillion-dollar mistake for India

India has no plans to lift the country’s cryptocurrency ban, according to information from Bloomberg. Indian authorities will ensure a smooth transition to the cryptocurrency ban. Asset holders will have three to six months to close positions, Bloomberg reports, citing an anonymous senior Finance Ministry official. According to the source, if you keep the cryptocurrency after the transition period, the investment will be liquidated.

How does the cryptocurrency ban threaten the Indian economy? Expert opinion.

Former Coinbase CTO Balaji Srinivasan expressed the opinion that banning cryptocurrencies in India carries high opportunity costs for the country.

Former Coinbase CTO @balajis tells @aditis90 @pratikbhakta89 that if India bans crypto currencies, it would not only lose out on a significant financial opportunity (trillion dollars!) but also see a flight of people to places that allow it @thecaptablecohttps://t.co/9VPij08LRc

— Madhav/The-CapTable.com (@madhavchanchani) February 15, 2021

According to the expert, possible restrictions on digital assets “will reverse economic liberalization” and this will actually become a blockage of the “financial Internet” in the country.

“It is very important that the upcoming ban on ownership, trading, mining, and investment in cryptocurrency does not come into force. For India, this would be a $ 1 trillion mistake, without exaggeration, ” – Srinivasan said.

He is confident that the ban will not help the authorities achieve the desired goal. According to the expert, the decision will lead to the withdrawal of capital from the country and the development of the industry outside of it.

“Banning digital assets due to cryptocurrency-related crimes is comparable to a driving ban to discourage drunk drivers,” – Srinivasan added.

If the bill is passed, the investor believes, India will become 20% poorer in the next five years.

Brief description of cryptocurrencies in India

Recall that in 2018, India banned banks and financial institutions from providing services to companies working with cryptocurrencies. The Supreme Court lifted the restriction last March. In December 2020, India’s Central Economic Intelligence Bureau proposed to impose an 18% goods and services tax on cryptocurrency trading.

Parliament will consider the government’s proposed digital asset ban bill during the upcoming budget session. The country is planning to release its own digital currency.

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