Cryptocurrencies face a ban in India.
Dreamstime
Cryptocurrencies were under pressure Wednesday amid plans in India to make most digital assets illegal.
The Indian government wants to ban most cryptocurrencies as part of its plan to introduce a digital currency regulated by its central bank, and has introduced a bill to that effect to be considered in the parliamentary session beginning Nov. 29.
The bill “seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to a bulletin posted Tuesday on the parliamentary website.
The news sent a shock wave through India’s cryptocurrency markets.
Bitcoin, the leading cryptocurrency with a market capitalization north of $1 trillion, tumbled nearly 15% relative to the Indian rupee on WazirX, an Indian digital asset exchange, before settling around 10% lower Wednesday. Ether, the second largest crypto, was also almost 10% lower in India.
India’s crypto regulation plans were also felt in global digital asset markets, though the impact was less pronounced. Bitcoin fell around 3% Wednesday from highs reached Tuesday, and was trading hands around $56,100, according to data from CoinDesk. Ether was down 4% from Tuesday highs.
Smaller cryptos—called altcoins—bore the brunt of the pressure, with Dogecoin down 7% from its Tuesday highs. Shiba Inu, which is widely viewed as a parody of the more popular, similarly dog-themed Dogecoin, tumbled 12%. Dogecoin has a market cap of nearly $29 billion, compared with Shiba Inu’s $21 billion.
“India’s plan to ban cryptocurrencies has not wrought the same damage on the Bitcoin price as China’s summer crackdown, but it nonetheless marks yet another stumbling block in crypto’s advancement as an economic force in the real world,” said Laith Khalaf, an analyst at broker AJ Bell.
Khalaf noted that the wording of the government bill suggests some digital assets will be spared to protect blockchain technology—though it was unclear which would be safe.
“There may be some question of how the government can prohibit the trading of cryptocurrency on private computers across international exchanges,” Khalaf added. “But a ban would at least prevent advertising and marketing activities, which should limit activity.”
Write to Jack Denton at [email protected]
