The Indian government is preparing to regulate cryptocurrencies in a bill expected to be presented November 29.

The bill would ban all private cryptocurrencies in India, but make certain exceptions for the development of blockchain technology. Although the contents of the bill haven’t yet been finalized, if passed, it would effectively ban Indian citizens from trading most cryptocurrencies.

The regulatory approach is just one part of the bill, which is primarily intended for the government to help the central bank create an official digital currency. Governor Shaktikanta Das has said the country requires further discussions on the matter of cryptocurrencies. The Reserve Bank of India (RBI) has never been shy about its disdain for cryptocurrencies, going so far as to effectively ban crypto in 2018, which was overturned last year.

Crypto ban fears

However, these new developments have restored fears of another ban on trading among India’s crypto investors. This has triggered heavy selling in the country’s digital currency market, causing several exchanges to face withdrawal challenges. Even leading Indian crypto exchange WazirX has had to resolve delays customers had complained of.

This also led to a sharper fall in the price of Bitcoin traded in India’s local markets than the rest of the world. For instance, Bitcoin was down 12.2% on WazirX, compared with 1.8% globally. Meanwhile, stablecoin Tetherslumped 25% to nearly 60 rupees ($0.8061) after news of the bill.

One crypto investor said the value of his portfolio had fallen over a third from 34,000 rupees to 22,000 rupees. “I am contemplating selling because the future is so unclear,” he added. Although there is no official data regarding the total number of people holding cryptocurrency in India, industry estimates put the figure somewhere between 15 and 20 million, whose total crypto holdings amount to around 400 billion rupees.

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