A senior government official has revealed that India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets.
The official added the bill would criminalise possession, issuance, mining, trading and transferring crypto-assets.
The Indian government had set an agenda to ban private virtual currencies such as bitcoin while building a framework for an official digital currency.
The official said the bill would give holders of cryptocurrencies up to six months to liquidate, after which penalties will be levied.
Officials are confident of getting the bill enacted into law as Prime Minister Narendra Modi’s government holds a comfortable majority in parliament.
If the ban becomes law, India would be the first major economy to make holding cryptocurrency illegal.
In India, despite government threats of a ban, transaction volumes are swelling and 8 million investors now hold 100 billion rupees ($1.4 billion) in crypto-investments, according to industry estimates.
Top Indian officials have called cryptocurrency a “Ponzi scheme”, but Finance Minister Nirmala Sitharaman this month eased some investor concerns.
The senior official said, however, that the plan is to ban private crypto-assets while promoting blockchain – a secure database technology that is the backbone for virtual currencies but also a system that experts say could revolutionise international transactions.