India has announced plans to introduce a bill to ban private cryptocurrencies and instead, create a framework for a central bank-backed digital currency.
India’s crypto market has boomed since the country’s Supreme Court overturned a previous ban in April last year, growing more than 600% over the past year according to research by Chainalysis.
Between 15 and 100 million people in India are estimated to own cryptocurrencies, with total holdings in the billions of dollars.
India’s central bank announced in June that it is working to introduce its own digital currency by the end of the year. Just last month, Nigeria launched its Central Bank Digital Currency(CBDC), dubbed the eNaira. The new eNaira will be issued by the CBN as legal tender like the current naira currency and will operate on the Hyperledger Fabric Blockchain. It will also follow the official exchange rate.
In September this year, China’s central bank also banned all financial transactions involving cryptocurrencies, declaring all of them, including bitcoin, illegal. The notice banned all related financial activities involving cryptocurrencies, such as trading crypto, selling tokens, transactions involving virtual currency derivatives and “illegal fundraising”.
The central bank argued that in recent years, the trading and speculation of bitcoin and other virtual currencies have become widespread, disrupting economic and financial order, giving rise to money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities.
China became the first major economy to pilot a digital currency last year. Since then, five countries have launched digitised currencies, according to a Central Bank Digital Currencies tracker by American think-tank Atlantic Council. Other African countries exploring CBDCs include Kenya, South Africa, and Rwanda.