Since yesterday, the news about the parts of proposed draft of "Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019" leaked in the media, FUD is spreading like a wild fire in Indian crypto community.

Why this news is not all rumour

Although many seasoned crypto adopters were quick to label this news (that originated from Bloomberg Quint) as another FUD as no credible source was quoted. But there are several reasons to believe that this news is not created out of thin air:

• The most important thing to note is that this news tells the name of the proposed Draft Bill as Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019
  This is the same name as was reported by Economic Times on 26th April, 2019.
• The news also points out about the recommendations to Prevention of Money Laundering Act 2002 to include under its purview transactions like mining, holding, generating, selling, transfer and disposal of cryptocurrencies. The same point was also hinted in Economic Times news of April 26.
• BloombergQuint specifically states that this proposed draft bill was accessed by them. So this puts all their prestige at stake. Therefore, they must have had some access to this draft.
• The news talks about very specific details and wordings from the draft bill. So this can't be termed as a vague report or rumour.

Why this news report may be unfair and biased?

It's said that half truth is a lie. When you don't have a complete perspective of any context, you can't judge the situation fairly.

If you carefully notice the exact wordings, it says clearly for where exactly punishment or penalty actually applies:

for any of the activities mentioned in, clauses (e), (g) and/or (h) of sub-section (1) of Section 8 shall be punishable

and

for the purposes mentioned in sub-section (4) of the section 9 shall be punishable

These wordings make it conspicuous that this draft does not recommend a blanket ban on cryptocurrencies in India.

In fact, the ban and punishment for the offense is conditional and depends on the content of section 8 and section 9 of this bill.

Unfortunately, we don't know what exactly it's written in Sections 8 and section 9. But we can speculate that they may cover unscrupulous activities of dealing in darknet or funding of illegal activities like terrorism, money laundering, running a ponzy scheme etc.

So if you don't intend to get involved in the activities mentioned in the specified clauses of section 8 and 9, it seems to be completely legal to deal in cryptocurrencies in India.

And even if content of these sections doesn't allow us to possess, mine, trade or earn cryptocurrencies, we shouldn't forget that this is merely a draft of a proposed bill and not a law in itself. It will need to go through the discussion and approval of both the houses in Parliament before it could be turned into a law. It's a long and uncertain process.

Ridiculous and funny

Interestingly, this draft bill has offered a window of 90 days for transitioning after the date of enactment of this Act. It says all existing cryptocurrency holders will have to declare and dispose their crypto assets within this time frame.

Now this is quite ridiculous and funny too. How can one sell her assets when it has already been declared illegal by the government. Who is gonna buy it! So practically, you can't sell any asset in that grace period too.

In past, when ban on poaching of some wild life was implemented, the existing holder of products like trophy, tiger skin or other animal articles were given license for possessing these. A similar thing happened for the possession of Shatoosh Shawls after their sale/purchase was banned by the Government in 1977. Even today there are some legally licensed Shahtoosh shawl holders in India.

Couldn't this be done for cryptocurrency hodlers too?

Funny thing about the 90 day time frame for disposing their crypto is that all Steemians will need at least 13 weeks i.e. 91 days to power down their SP. There are other cryptocurrencies like Obyte's Gbyte that is held in smart contracts for 365 days. What if that smart contract releases crypto in our wallet after the ban? Will it make us criminal?

In conclusion, it's not possible and logical to pass such a blanket ban on crypto. We need to wait for the complete draft to know what exactly is being proposed. Of course, such a draft won't be let to go through the Parliament unchallenged by the crypto community of India.