The government listed a bill that would ban “all private cryptocurrencies” in India and provide a framework for the creation of an official digital currency issued by the Reserve Bank of India. Titled “Cryptocurrency and Regulations for Official Digital Currency in 2021”, the bill will be considered in the ongoing budget meeting of Parliament. According to the technical background of cryptocurrency, the Reserve Bank of India is already studying the possibility of issuing a digital version of the rupee, which will eventually become the country’s central bank digital currency (CBDC).
Although sufficient details about the planned changes have not been disclosed, the government mentioned in the Lob Sabha announcement last Friday that the bill aims to “provide a framework for the creation of official digital currencies” and “ban all private cryptocurrencies in India.” “However, it will have certain exceptions, such as “the basic technology to promote cryptocurrency and its use.”
It is worth noting that this is not the first time the government has shown interest in banning cryptocurrencies in the country. In April 2018, the Reserve Bank of India effectively banned cryptocurrency transactions through banks and e-wallets. This move was initially supported by the Supreme Court, although the notice issued by the Central Bank was later cancelled.
A similar bill was also drafted in 2019. A group was formed to propose a sentence of ten years in prison for those who hold, sell, or trade cryptocurrencies, including Bitcoin. However, the government did not implement the proposal.
The recent rise in Bitcoin prices has attracted Indians and Indians from other countries to start cryptocurrency transactions. Some people have also started to mine cryptocurrencies in the country to gain some share from the rising adoption rate. However, the growth of cryptocurrency transactions has also brought a surge in fraud, because Bitcoin and other such currencies are not regulated like traditional currencies.
Experts believe that just proposing a bill does not mean that the bill will form a legal status in the short term.
“Wrong or hasty regulations will set us back ten years,” Tweet Nischal Shetty, founder of Bitcoin and cryptocurrency exchange WazirX. “The right regulations will push India to the forefront of this field [cryptocurrency] technology. “
The country has leading cryptocurrency platforms such as WazirX, BuyUcoin, CoinDCX and CoinSwitch Kuber, which will be directly affected by the restrictions of the government’s plan.
Vishal Gupta, co-founder of the Bitcoin Alliance, predicts that no matter what actions the government takes, cryptocurrency business will continue.
He told Advertisement Shout: “Regulating exchanges is a more sensible choice adopted by most countries.” The US exchange Coinbase is now publicly listed on NASDAQ. I hope we will not catch up with the rest of the world as we have done in the past. “
In addition to seeking ways to ban cryptocurrencies to some extent, the government is currently exploring the potential of a digital version of the rupee. The Reserve Bank of India pointed out in a pamphlet issued earlier this week that it is exploring whether it needs information on the digital version of fiat currencies and how to operate fiat currencies when possible.
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