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Here’s the latest country looking to ban cryptocurrency

Here’s the latest country looking to ban cryptocurrency
Image source: Getty Images

Whilst some countries, such as El Salvador, are beginning to look favourably on digital assets like Bitcoin (BTC), others are clamping down on cryptocurrency.

The latest country to join the anti-crypto movement is India. Here’s what’s going on, what it means for investors and why one of the biggest countries in the world is not a fan of cryptocurrencies.

What’s going on in India with cryptocurrency?

Similar to China’s relationship with cryptocurrencies, India has a muddled bond. For years the government has spoken out against assets like Bitcoin. But the tokens remain popular among the population.

There has been lots of talk for years about shutting down India’s cryptocurrency industry using the power of law and legislation. However, designing and passing laws in a democratic country can take a long time.

Why is India looking to ban cryptocurrency?

The ban is designed to stop the use of private cryptocurrencies. It was rumoured India was going to soften its stance and use regulation instead of a blanket ban. But it now looks like the harsher approach has won out.

By removing the option of private cryptos, it makes it easier to encourage and promote a state-controlled digital asset.

The BBC says that this ban is to help the Indian government steam-roll ahead with their own national digital currency, which will come from the central bank, the Reserve Bank of India (RBI).

When will the ban come into force?

It looks like the new rules are close to completion and will form part of a proposed bill that will come into effect in the near future.

The final draft of the bill has not yet been made public, but the details should be available any day now.

What does this mean for cryptocurrency investors?

For holders or ‘hodlers’ in India, a ban will mean having to either:

  1. Sell all of their digital assets
  2. Move their cryptocurrency to offline wallets or international exchanges

There’s an estimated 15 to 20 million crypto users in India with total holdings worth around £4 billion. So it’s not pocket change or just a handful of people we’re talking about here.

The news of India’s impending ban did send a shockwave through the market and added to other bad news that’s led to a market sell-off.

Are there safer ways to invest than cryptocurrency?

It’s still not clear how a number of countries around the world will eventually respond. Will they reject or embrace digital assets?

It all means that there is a lot of potential risk for investors. But if you’re looking to invest without the peril, it’s still possible. Instead of owning code, investing and buying shares means you can actually own part of a company. It’s even possible to invest in crypto-related companies if that’s your jam.

If picking out individual stocks sounds too daunting, you could consider using an investing solutions provider (or robo-advisor) to build a diversified portfolio.

All investing carries risk, so make sure you research any path carefully and understand you may get out less than you put in.

The content in this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets. They carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

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