Less than 12 hours ago Reuters News published an article titled, “India to propose cryptocurrency ban, penalising miners, traders – source,” in which an “unnamed” source stated “India will propose a law banning cryptocurrencies.”
The price of Bitcoin, which had been hovering around the $60k level, immediately began a selloff after the story was published, falling about $6,000 in several hours to a low of just over $54k:
It should be noted that this is NOT a new story. The uncertainty and fear caused by the idea that “India is going to ban cryptocurrency” has been ongoing for months. It seems that this story keeps popping up every time someone wants to cause a selloff in the crypto markets.
Here are just a couple examples of the exact same story. This first one was published by Bloomberg last summer:
Bloomberg again published an article with the same theme of “India cryptocurrency ban” just last month:
This story of a cryptocurrency ban in India has been hashed, re-hased, and hashed some more over the past couple of years. It is obviously not a fresh story, and more of a well-used – but still effective – FUD manuscript that continues to resurface whenever someone wants the crypto market to have a tumble.
As Andreas Antonopoulos has said, governments certainly have the power to enact a law than bans the ownership and use of cryptocurrency; however, their power to actually prevent the ownership and use of crypto is much weaker. It is quite possible that any law aimed at preventing people from getting cryptocurrencies would have the unintended effect of doing the exact opposite.
But is India even planning to pass such a law?
Several days ago the Finance Minister of India, Nirmala Sitharaman, gave an interview to CNBC TV18 in which she indicated that while the government wants regulation of cryptocurrencies, it does not want to completely eradicate them:
The Indian government might not completely ban cryptocurrencies. In an interview on March 5, country’s finance minister Nirmala Sitharaman said that she wants to foster innovation in crypto.
“We want to make sure that there is a window available for all kinds of experiments which will have to take place in the crypto world,” she said during an interview on CNBC TV18, a business and financial news television channel in India. “We are not closing our minds.”as reported in Quartz India
The fear, uncertainty and doubt caused by threats of a potential government ban certainly can have a short-term effect on crypto prices.