The Indian government will submit legislation to prohibit private cryptocurrencies and establish a framework for a central bank-backed digital currency, parliament announced late Tuesday.
The new measure “seeks to prohibit all private cryptocurrencies in India,” according to the Lok Sabha, and follows Prime Minister Narendra Modi’s warning last week that Bitcoin poses a risk to younger generations and could “spoil our youths” if it falls into “the wrong hands.”
It is the latest such move by a major emerging economy after China declared all cryptocurrency transactions illegal in September.
India’s cryptocurrency market has boomed since the country’s Supreme Court overturned a previous ban in April last year, growing more than 600 percent over the past year according to research by Chainalysis.
Between 15 and 100 million people in Asia’s third-largest economy are estimated to own cryptocurrencies, with total holdings in the billions of dollars.
Their investments will now face an uncertain future.
India’s central bank announced in June that it is working to introduce its own digital currency by the end of the year while warning it has “serious concerns” about private cryptocurrencies like Bitcoin, Ethereum and others.
According to the parliament’s bulletin of impending business, the bill will allow for some exclusions to encourage bitcoin technology, but no further information regarding the proposed legislation have been disclosed.
Bitcoin’s market price remained unaltered, rising two percent in Tuesday’s transaction.