7 December 2021
Yesterday, the Indian government introduced a draft of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. However, sources claim that the new bill will bring regulation, not ban.
Cryptocurrencies in their INR trading pair plummet in a flash crash. Most of the Indian Crypto exchanges were intermittently down, deposits were not working, and there was an extreme fear in the market.
All the major platforms covered the news that the government could introduce a bill in the parliament winter session banning Cryptocurrencies in India, with few exceptions, and a framework for the official digital currency issued by the Reserve Bank of India (RBI).
As expected, all the major Cryptocurrencies crashed around 15% and more. Bitcoin sheds over 18.53%, Ethereum falling by 15.58%, and Tether by 18.29%.
After the news of regulation and not ban came up, the Crypto market seems to be stabilizing.
Though the bill has mentioned private cryptocurrency it is not yet defined what exactly it covers. In the Crypto space, private Cryptocurrency means the ability to completely hide the transaction details.
If the Indian government follows the above classification, then it would ban coins such as Monero, ZCash, etc., as they offer complete privacy and untraceability of transactions.
India's relation with Crypto has always been indecisive. Back in 2018, RBI had banned Cryptocurrencies. Then in 2020 the Supreme Court lifted the ban, now there are negotiations between the Crypto industry and the Centre to bring in a regulation that will put corrupt practices to check.
As per the Blockchain and Crypto Assets Council, India holds about ₹ 6 lakh crore in Crypto assets.
The government source said that “One would know the content of the bill only when it is tabled. Right now, it is unclear even if the bill has been prepared. ”
In the past decade, private digital currencies have gained popularity, and regulators have always been doubtful of these currencies and concerned over the associated risks.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.