The Government in India proposes to introduce The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the budget session. It is to be seen whether it bans holding and/or trading crypto assets in India. It is to be seen whether the law will apply to Indians holding crypto assets anywhere.

It is estimated that some 7 million Indians hold crypto assets worth over $1 billion. These investors are likely to move their crypto assets to bitcoin-friendly countries such as Singapore and Malta. These assets can be picked up by the traders in the US, Europe and China. A large sale could depress the prices too.

Indian crypto exchanges have subsidiaries abroad where such assets can be transferred. But if the ban extends to holding anywhere, the situation would be difficult.

Some exchanges can operate on the lines of fund of funds. Here the investors would not hold the cryptos directly.

There could be legal issues. If the proposed legislation bans private cryptos, the issue is none of the cryptos can be called private assets as they do not have an owner or issuer. India should not miss on the Fourth Industrial Revolution in which the crypto assets are an integral part. In fact, a central bank sponsored currency is more private than public currency such as Bitcoin.