Cryptocurrencies on Indian exchanges lost as much as a fourth of their value on Wednesday as panicked investors dumped their holdings amid prevailing confusion over whether the government would ban trading of such assets.
Crypto industry executives, however, claimed that a complete ban is unlikely given the mass adoption of crypto assets, with the government most likely to bring them under the oversight of local regulators.
While some media reports said the proposed ban would encompass all private cryptocurrencies, including their mining, holding and trading, others reported that the government may treat cryptocurrencies as financial assets.
The finance ministry did not immediately provide details about the draft law. A ministry official said one should wait for the bill to be tabled in Parliament.
Meanwhile, the worlds most-traded cryptocurrency, bitcoin, crashed to as low as ₹33,50,000 ( ₹33.5 lakh) on crypto exchange WazirX from a high of ₹46,35,371. In the global markets, bitcoin was trading around $56,800 ( ₹42.21 lakh), according to CoinGecko, a digital currency price and information data platform. Even tether, a stablecoin pegged to the dollar, traded at a discount of 25% in India. Other prominent coins such as ether, Shiba Inu and dogecoin also plunged by about 20% on Indian crypto bourses.