In Brief:
- The Indian Government has listed the cryptocurrency bill for the upcoming winter session.
- The bill seeks to create a framework for the creation of the official digital currency issued by the RBI.
- However, it also seeks to ban all private cryptocurrencies in India.
The Indian Government listed the much-awaited cryptocurrency bill for the upcoming winter session, which had been originally listed for discussion and passage in the Budget session of the parliament.
Lok Sabha published The bulletin Tuesday, which lists “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” for introduction, consideration and passing.
The bill aims to outlaw all private cryptocurrencies in India. The purpose is to regulate cryptocurrency and supposedly ban all private cryptocurrencies, along with 25 other pieces of legislation on November 29. It does, however, allow for certain exceptions in order to promote cryptocurrency’s underlying technology and applications.
The bill seems to be the same as the draft bill submitted in January, it is unclear whether both are identical since the latest draft is not yet publicly available. However there is a high probability that the contents had changed in the bill.
Several meetings between the industry and the government were held to decide on the passage of the bill. Based on that, this new financial regulation bill will create a facilitative framework for the creation of the official digital currency to be issued by the RBI (Reserve Bank of India). Consequently, the bill will also introduce a framework for the use of cryptocurrency in India.
This ambiguity between Indian regulatory and union government over cryptocurrencies is not a new issue. Recently, RBI announced its stance on this matter, disclosing its plan to introduce pilot digital currency in Q1 of FY23. Still, the central bank expressed skepticism on whether the tiered model is appropriate for digital currency or not.
Last week, Indian Prime Minister Narendra Modi addressed the democratic nations, urging them to work collaboratively on cryptocurrency. He also stated that the primary danger with cryptocurrencies is that they can fall into the wrong hands. The cautious attempt by the Indian government to introduce a cryptocurrency bill with some limitations validates the decision.
Nevertheless, crypto investors continue to seek clarification on the legality of cryptocurrency. The long-awaited cryptocurrency bill is anticipated to provide concerned crypto traders some relief. Industry estimates put the number of crypto investors in India at 15-20 million.
The abrupt decision to prohibit all private cryptocurrencies was reflected in Indian crypto exchanges, which saw a significant drop this morning. Bitcoin fell more than 13% on WazirX, while shiba inu and dogecoin both fell more than 15% in the hours after the revelation. This drop was limited to Indian platforms however, non-Indian platforms’ price stayed green.
