As the government happens to be within the final stages of initiating new legislation encircling Bitcoin and other utility tokens in India, cryptocurrency investors are scrambling to discover ways to protect their holdings. India is likely to proceed ahead with a complete ban on cryptocurrency investment with the help of foreign and domestic exchanges, thereby providing investors with a transition period of 3 to 6 months. However, the entire details of the proposed Crypto bill are not in the public domain yet. 

No official data being available yet, the biggest Crypto exchanges claim – there are approximately between 60 lakh to 1 crore cryptocurrency holders in the nation, with individual holdings up to Rs 10000 crore. These cryptocurrency investors are exploring options ranging from self custody wallets to selling and transferring their tokens. The provisions, incorporated within the upcoming legislation, might eventually guide them to these choices. 

Shift to Self Custody Wallets

Moving their security holdings into self custody wallets is one option that cryptocurrency investors are exploring. It indicates that cryptocurrency investors could save their digital wealth in a hard wallet, which signifies a small digital device like micro SD, smart card, or USB drive. Such devices help store the private Bitcoin keys of the investor and can be locked away or sent to a relative or friend. On the other hand, online self custody wallet services are only provided by a few global forms among others. 

Various cryptocurrency investors have queries on how they can stash their digital utility tokens away from Crypto exchange wallets. There are innumerable ways to store cryptocurrency, however, the easiest signifies taking custody of wallets. Investors worried about their end in this field are looking forward to shifting their digital currencies from their exchange custody to self custody hardware or online wallets. But, if a cryptocurrency happens to be transferred via a wallet existing on the Indian Crypto exchange professionals can easily track it down. 

No matter whether the blockchain system happens to be decentralized or not, the KYC rules and regulations followed by the cryptocurrency exchanges of the country need users to reveal their identity, thereby signifying a way for authority to trace it back to the person holding the cryptocurrency in the Crypto exchange’s wallet. 

Also Read: PayBito Experiences Record Sign-ups After Bitcoin’s Value Surpasses $40,000

Transfers to Family and Friends Living Overseas

Transferring their cryptocurrency tokens from their own wallet to their friends and family living abroad is another option that Crypto investors can explore, following the impending ban on cryptocurrency in India. 

This is not much of a problem as cryptocurrency investors could readily transfer Bitcoins from their own wallet and send it as a gift to their relatives and friends before the Indian Crypto ban gets enforced. It is likely to be followed by an Indian Crypto investor giving up the ownership of those Bitcoins. Once the process of transfer is complete, the receiver of those cryptocurrencies is likely to become liable to pay tax on those utility tokens in their home nation. 

The ability to perform the same would entirely be dependent on the provisions of the bill. While the initial draft requires to be reviewed for getting more clarity on whether or not this will be allowed, it is anticipated that cryptocurrency investors will need to protect and liquid their holdings in any way or other. 

Selling and Exiting

The last option simply remains selling and exiting, though there is not much evidence yet of any kind of panic selling. Presently, panic selling only happens to be among the somewhat new cryptocurrency investors who started investing throughout the Bitcoin rally and have performed speculatively. Even though some increase in Crypto wallet withdrawals has been in February, the transformation is not much significant. 

No procedure can determine how the ultimate end user is saving their cryptocurrencies, however, the increase in withdrawals is not significant anyway. 

Wrapping Up

Even with all banking relationships being intact, there remains no process to discover the final outcome of the new bill yet. Investors have been in a long haul and have not witnessed any big increase in Crypto wallet withdrawals, thereby saving a case or two. If the cryptocurrency ban happens to be imposed, it is likely to result in an underground Crypto market forcing authorized and genuine investors to work in a regulated environment, thereby serving the purpose of nobody. 

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