What if India outlawed all private cryptocurrencies?
India's Cryptocurrency Ban: The Indian cryptocurrency market has been in a frenzy since the government announced plans to regulate digital assets during the forthcoming winter session of Parliament. Cryptocurrencies' values plummeted on Wednesday, a day after the government's proposal was revealed, and investors are worried about one thing: what will happen if India bans cryptocurrency. Bitcoin prices fell to roughly Rs 34,000 on the day, owing to a combination of factors including end-of-year profit-booking, increased selling pressure, and the Indian government's decision to introduce a bill on "Cryptocurrency and Regulation of Official Digital Currency" soon.
The bill has also piqued the interest of Nikhil Kamath, the founder of the online profit booking site Zerodha. "Is the Indian government planning to outlaw cryptocurrency?" "What happens to stuff that's already in circulation?" he wondered on Twitter. India Bann all private cryptocurrencies
Kamath's concerns should not be overlooked. According to a report by moneycontrol.com, India's crypto sector estimates put the number of crypto investors at 15 million to 20 million. With this, the country's total cryptocurrency holdings have risen to Rs 40,000 crore, or $5.39 billion.
The government's bill, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, wants to "prohibit all private cryptocurrencies in India, although it allows for specific exclusions to encourage cryptocurrency's core technology and purposes." The bill is one of 26 that the Centre intends to introduce during the winter session.
According to central government sources, the administration is considering "forward-thinking and innovative" regulation. Following the meeting, Parliament's standing committee on finance convened to hear from several industry players.
PM Modi stated at the Sydney Dialogue, a forum on emerging, critical, and cyber technologies. It is critical that all democratic nations collaborate on this to guarantee that it does not fall into the wrong hands, endangering our youth.
The government has stated repeatedly that cryptocurrency will not be completely banned in India, and that only private coins will be controlled. To prevent cryptocurrency from being abused, a regulatory framework will be in place. The government is concerned about cryptocurrency's underground transactions, notably its involvement in 'hawala' and terror funding, according to sources speaking to CNN-News18 on Wednesday.
"Astringent structure will be in place to allow law enforcement agencies to track the origin of cryptocurrencies used for the illicit or anti-national activity," they added.
The Reserve Bank of India is likewise working on developing its own digital money. "To provide a conducive framework for the formation of the Reserve Bank of India's official digital currency," it continued. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was not mentioned in the LokSabha bulletin. India Bann all private cryptocurrencies
The government is considering a bill that would prohibit private cryptocurrency but would allow the RBI to issue its own digital money.
The government will introduce legislation to establish rules for cryptocurrencies that will restrict private coins while also laying the groundwork for the Reserve Bank of India to issue an official digital currency (RBI).
According to a bulletin provided by the LokSabha on Tuesday, the measure is one of 26 bills scheduled for consideration during the winter session of parliament. The cryptocurrency sector is confident that cryptocurrencies will not be outright banned.
"In addition, the measure wants to outlaw all private cryptocurrencies in India." The Cryptocurrencies and Regulation of Official Digital Currency Bill, 2021, "allows for specific exclusions to promote the underlying technology of cryptocurrency and its usage," according to the bulletin. It also aims to "provide a conducive framework for the formation of the Reserve Bank of India's official digital currency."
India is seeking a middle ground on cryptocurrencies, according to ET, as it finalizes legislation for the winter session.
Private cryptocurrencies have raised concerns at the Reserve Bank of India, with governor Shaktikanta Das describing them as a threat to macroeconomic and financial stability.
Digital currencies, according to the crypto platforms, require regulation and should not be banned.
"While the draught bill's description appears to be the same as it was in January 2021, several notable events have occurred since then," says the author. "First, a public consultation was sought by the parliamentary standing committee, and then our Prime Minister himself came up to advocate for crypto rules in India."
The government had originally planned to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, during the budget session, but it was postponed.
Prime Minister Narendra Modi convened a high-level meeting on cryptocurrencies earlier this month, which included officials from the Reserve Bank of India, the Finance Ministry, and the Securities and Exchange Board of India (Sebi).
Following that, members of the parliamentary standing committee on finance met with representatives from the crypto business, stakeholders, and specialists. The panel's chairman, Jayant Sinha, told ET that the committee had taken no position on cryptocurrencies, despite the fact that the industry claimed 15 million registered users and Rs 600 crore in total investments. India Bann all private cryptocurrencies
The increased popularity of cryptocurrency as an investment has raised concerns.
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