On Friday, the Government of India had published a bulletin on the Lok Sabha website, stating the banning of private cryptocurrencies in India. Though the bulletin under the title “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,” is still not adequately explained, the people of India who are related to the cryptocurrency world has gone into a total frenzy. Most people related to the crypto market have started to panic and also have started to pull out their investment from the crypto market, thinking that the total crypto market will get banned and they will lose all their investments.
The bill is supposed to be considered in today’s budget session. As per the bulletin, aside from the banning of private cryptocurrencies, it is also mentioned that the Government of India is planning to bring its own official digital currency which will be regulated and issued by the Reserve Bank of India. The bulletin also mentions that there would be certain exceptions to the ban like promoting the underlying technology of cryptocurrency and its uses. We have quoted the exact lines from the bulletin below:
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 crytptocurrency and its uses.
Similar scenarios in the past
This is certainly not the first when the government has tried to ban or put restrictions on the crypto market in India. In April 2018, the RBI had banned all cryptocurrency transactions via banks and e-wallets. The ban was at first backed by the Supreme Court of India but later the Court reverted it.
A similar ban was also proposed in 2019. The draft back then stated that anybody who was found holding or trading in cryptocurrencies (including Bitcoin) would be imprisoned for 10-years. However, the draft was not proposed in the Parliament by the government back then.
Right now the country has various crypto exchanges that will be directly impacted by the restrictions proposed by the government. Some of the leading crypto exchanges which will be most affected are WazirX, BuyUcoin, CoinDCX, and CoinSwitch Kuber.
What do the experts say?
Nischal Shetty, the founder of Bitcoin and cryptocurrency exchange WazirX, had tweeted that “Wrong or hasty regulations will set us back by a decade,” along with that he also tweeted “Right regulations will catapult India to the forefront of this [cryptocurrency] technology.”
Vishal Gupta, the Co-Founder of Bitcoin Alliance, believes that the cryptocurrency market of India will keep on flourishing irrespective of the government’s decision.
Shivam Thakral, the CEO, BuyUcoin also requested the government to take the opinions of all the stakeholders before taking a decision.
Experts believe that it is still too early to jump on to any kind of conclusion that the whole crypto market would get banned as it is very much unclear about what does the Government of India mean by banning of private cryptocurrencies just from reading these few lines from the bulletin.
As per experts, people shouldn’t panic over a few lines mentioned in the bulletin. The whole picture should get cleared on its own in today’s budget and if by chance the cryptocurrency market totally gets banned which is highly unlikely to occur, it can be surely said the government will allow the investors a certain time to pull away from the market.
That will be all for now folks. Make sure to stay tuned to this website for more updates.