India’s domestic exchanges have witnessed a crash in cryptocurrency prices after reports on the government’s plan to introduce a bill that would ban most private cryptocurrencies.

Leading cryptocurrencies, including bitcoin, ethereum, and dogecoin saw their prices dropping by about 15-20% in Indian rupee terms on Wednesday.

Under the expected Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, mining, holding, selling, issuing, transferring or use of cryptocurrency in India will be punishable by law with a fine or imprisonment of up to 10 years, or both.

The draft bill, introduced on Tuesday, allows using the processes or technology concerned with any cryptocurrency for the purposes of experiment, research, or teaching. India is also looking to develop a framework for the country’s official digital currency, which will be issued by its central bank through this bill.

The draft bill acknowledges that virtual tokens have benefits such as better record-keeping and more efficient cross-border payments. However, it also raises concerns over the potential use of cryptocurrencies for money laundering, risks to consumers, and threats to the country’s financial stability.

Currently, there are no regulations in India that govern the use of cryptocurrencies. With the new bill, the government considers banning “all private cryptocurrencies”, albeit with some exceptions that have not been made clear.

WazirX chief Nischal Shetty requested investors to not panic and show faith in cryptocurrencies.

“This is not the end but the beginning of crypto regulations in India. The industry has had the opportunity to present. Lawmakers understand the growing market,” Mr. Shetty said.

“Over 15 million people own crypto in India. There are ways to curb the bad activities and promote innovation,” he added.

The domestic market crash has, however, not affected the global crypto market, with bitcoin continuing to trade close to the $57,000 mark.