Cryptocurrency investors in India are concerned that the country’s parliament will consider a government-backed bill to ban “private” cryptocurrencies.
Late last week, it was revealed that the 2021 Cryptocurrency and Official Digital Currency Regulation Bill, under consideration by legislators, bans the use of cryptocurrencies in India and provides the basis for the creation of an official digital currency to be issued by the Reserve Bank of India (RBI).
According to experts, the government’s definition of “private” cryptocurrency means that any digital currency issued by a non-government can be considered “private”, including bitcoin. It is unclear which cryptocurrencies will be affected as the bill allows for certain unspecified exceptions to promote the underlying cryptocurrency technology and its use.
“It’s time to get nervous,” an anonymous spokesman for a major cryptocurrency exchange told the Economic Times of India.
CEO of cryptocurrency exchange in Mumbai WazirX Nischal Shetty criticized initiative. He said that “there is no private cryptocurrency,” and the bill aims to help RBI issue state-owned cryptocurrencies by banning so-called “private” cryptocurrencies, with a few exceptions.
“A big country like India should at least work on understanding the underlying terminology before submitting technology-related bills to parliament. This initiative seems hasty, “Shetty said.
He added that the bill may not be approved. Incorrect or hasty regulations will set India back ten years, Shetty said, and correct regulation will bring the country to the forefront of the technology. If the bill is passed, India will become the only major Asian country to ban private cryptocurrencies, rather than regulating them like corporate shares.
Recall that in 2018, RBI banned banks and financial institutions from providing services to firms working with cryptocurrencies. However, in March 2020, India’s Supreme Court overturned the RBI directive.
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