In this winter session of the Indian Parliament starting from November 29, the Central government is planning to introduce a bill that might ban private cryptocurrencies.
The winter session of Parliament starts on November 29. A Bill titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ is planned to ban cryptocurrencies and this will be among the 26 pieces of legislation which will be placed for discussion in the House for discussion and passing.
Confirming about the bill, a posting in the official Lok Sabha website said –
To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank Of India,
The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,
It is to be noted that a high-level meeting was held by Indian Prime Minister Narendra Modi related to reviewing the ways of cryptocurrencies in the country’s economy.
Sources say that after the high-level meeting PM Modi, the Parliamentary Standing Committee on Finance has met with many industrialists to seek their views about the cryptocurrency transactions in India. On November 16, a major view that was expressed was that digital currency trading cannot be stopped but can be regulated.
The RBI governor said –
Investment in crypto products does not benefit the fintech but it does create a parallel unregulated pool of investments and can destablise the macroeconomic environment.
Why India Plans A Bill For Cryptocurrencies Ban?
Since 2019, India has been focusing on the cryptocurrency risks in India. A committee was appointed with an economic affairs secretary Subhash Chandra Garg in 2019 itself which reported a ban on private cryptocurrencies in India.
Adding strength to the committee’s report, the Securities and Exchange Board of India (SEBI) also voiced concerns about the unregulated growth of cryptocurrencies in India.
India being a big market for anything, regulation of cryptocurrency has become inevitable. A major concern is that the unregulated digital currency may lead to terror financing as well as may become an avenue for money laundering sources. Another aspect of the unregulated cryptocurrency market is that the youth may be misled by non-transparent advertising. One of the important points that have to be noted is that India is estimated to have the world’s largest cryptocurrency investors.
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RBI and the Government of India have been in discussions about the legislation as there is a sharp increase in the interest by several individuals which also involved senior citizens in investing in private digital currencies.
There are reports of RBI examining the feasibility of launching its own digital currency, but a possible date for launching this pilot project is yet to be decided. Briefing about RBI’s own digital currency, the government’s statement said-
To create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India.
In India, Digital investment products, which are developed using crypto technologies have to be approved by a regulatory body — the SEBI (Securities and Exchange Board of India), or IRDAI (Insurance Regulatory and Development Authority of India), or RBI (Reserve Bank of India).
Crypto Prices Crash
As the news of introducing a bill to ban private cryptocurrencies was leaked, all major cryptocurrencies saw a downfall today-
Bitcoin down over 17%
Ethereum falling by close to 15%
Tether down by almost 18%
El Salvador is the only country to recognise Cryptocurrency as a legal tender.