The government in India is considering blocking the IP addresses of crypto exchange sites to prevent the use of cryptocurrencies in the country. The desired result of this initiative aims to regulate and eventually stop the operations of popular crypto exchanges and discourage users from investing in digital assets.
According to a report published by India Today, blocking IP addresses is not the best option. This is because users can still access these sites via virtual private networks (VPN), as well as peer-to-peer trading and digital wallets outside of India.
Since January of 2021, the Indian government has been taking steps to eliminate cryptocurrency. The proposal for blocking the IP addresses is the latest step in their initiative. It started with the introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill last January. It aims to build a framework for an official digital currency that will be regulated by the Reserve Bank of India (RBI).
Furthermore, the bill seeks to ‘prohibit all private cryptocurrencies in India’, as well as criminalise all crypto activities in the country. It is speculated to be implemented later this year. Meanwhile, the government is overseeing a proposal that aims to have a regulated government-based cryptocurrency instead.
Specific contents of the bill are not clear, but according to an article released by India Today, the possession, issuance, mining, trading and transferring of crypto assets will be prohibited. Punishments such as fines and imprisonment will also be implemented. Moreover, it’s not clear as to whether the blocking of IP addresses is included in introducing the bill to the public.
In the event that the bill and the blocking of crypto exchanges will be implemented, millions of Indian crypto users and various crypto exchange sites will be affected. On March 10, exchange sites and related non-profit organizations like the Internet and Mobile Association of India (IAMAI) have asked the government for reconsideration.
‘We are urging the government to define the cryptocurrency regulation after due consultation with IAMAI and stakeholders such as Indi crypto-asset groups and the exchanges that facilitate buying and selling,’ IAMAI stated in a press release.
In response to these remarks, Finance Minister Nirmala Sitharaman assured that the government is not completely shutting down cryptocurrencies.
‘From our side, we are very clear that we are not shutting all options. We will allow a certain window for people to do experiments on blockchain, bitcoins, or cryptocurrency.’ Sitharaman stated in an interview with India Today Conclave on March 14.
According to reports by Business Today, in the event that the bill pushes through and the IP addresses of crypto exchanges are blocked, India will officially become the first major economy to make cryptocurrency illegal.
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