Indian government to ban cryptocurrency

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Image source, Reuters

India’s long-awaited bill will ban cryptocurrency in India.

Recent months have seen increased expectations that the government might soften its position on digital currencies.

All private crypto currencies would be affected by the ban, but there are certain exceptions for those who wish to promote the technology or its use.

The decision to cancel the bill resulted in cryptocurrency prices dropping on Indian markets.

Bill focusing on crypto

The ban, according to the government bulletin is part of the Cryptocurrency and Regulation of Official Digital Currency Bill which will be introduced during the winter session.

This legislation is intended to “create a facilitative environment for the creation of an official digital currency that will be issued by Reserve Bank of India (RBI).”

All private crypto currencies would be banned under the new plan, which appears to have been identical to the Jan. draft.

Recent months have seen it suggested that the government might soften its position on cryptocurrency, perhaps seeking to regulate them as assets rather than a payment method.

Although the bill’s description has not changed, exact differences are still to be determined as the most recent draft isn’t yet available.

Market impact

According to reports, the value of several digital currency fell after the bill was announced.

Bitcoin dropped by more than 13% at WazirX’s Indian exchange, while Shiba Inu (and Dogecoin) both fell over 15%.

Glen Goodman of The Crypto Trader said that it had a “relatively minor” global impact.

“Even though China bans cryptocurrency (which was quite a big deal), it doesn’t totally massacre crypto markets,” said he.

India Today has a video that reports on cryptocurrency trading. It says the proposal bill will allow users to trade in crypto as long as they buy only from authorized exchanges.

Reports also indicated that the bill might restrict the creation of cryptocurrencies with the intention to protect investors.

‘Serious concerns’

According to CoinDesk, the RBI is the central bank of the country and has conservative views on cryptocurrency.

India’s supreme Court overturned two-year RBI ban on cryptocurrency trading in March 2020.

Last week, Shaktikanta Das, the RBI Governor, stated that the bank has “serious concern from the perspective of macroeconomic and financial stability” and that Blockchain technology could thrive without cryptocurrency.

Mr. Goodman referred to China’s recent ban, as well as El Salvador’s planned to construct a Bitcoin-based city on top of a volcano using the cryptocurrency to pay for the project.

“Governments have different ways of seeing it,” he stated. He said, “As either a threat or an opportunity, and somewhere in between.”

Goodman stated that the Chinese government would like to eliminate all digital currencies, except for the one it has created.

“They are determined to be the dominant cryptocurrency market, and I believe the Indian government is also interested in the same thing.”

They think that if China does it then we can too.”

Source: BBC.com

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