In a long-awaited law, India is prepared to move through with its aim to prohibit most cryptocurrencies in the nation.
In recent months, there had been growing speculation that the government will change its stance on digital currencies. The prohibition would apply to all private cryptocurrencies, with some exclusions to allow for the promotion of the technology and its applications. After the decision on the bill's future was made, cryptocurrency prices fell on Indian exchanges.
Crypto-focused bill
The restriction is part of the proposed Cryptocurrency and Regulation of Official Digital Currency Bill, which will be submitted in the legislature's winter session, according to a government bulletin.
"To create a facilitative environment for the formation of the official digital currency to be issued by the Reserve Bank of India (RBI)," the proposed legislation states. The proposal to ban all private cryptocurrencies appeared to be nearly identical to a previous draught of the bill published in January.
The government has been said to be softening its attitude on cryptocurrencies in recent months, presumably attempting to regulate them as investments rather than a form of payment. While the bill's description hasn't changed, the actual alterations have yet to be determined because the latest document isn't yet available to the public.
To provide a structure that will make it easier for the Reserve Bank of India to develop an official digital currency. The Bill also aims to ban all private cryptocurrencies in India, although it makes exceptions to encourage the underlying technology of cryptocurrency and its applications, according to an official document obtained by India Today Tech. The Crypto bill is one of 26 laws the government intends to submit in the upcoming winter session.
The Reserve Bank of India, on the other hand, has been dismissive of Bitcoin and other cryptocurrencies. Only a few days ago, RBI governor Shaktikanta Das emphasised the risks associated with cryptocurrencies, calling them a menace to any financial system until they are regulated. He said that cryptocurrencies pose a severe threat to the country's macroeconomic and financial stability, and that the number of people trading on them, as well as their claimed market value, are both inflated. It's worth noting that India is one of the world's largest cryptocurrency markets. According to a recent research, India has over 10 crore cryptocurrency owners, while local crypto exchange businesses claim that approximately 2 crore Indians have invested in cryptocurrencies.
In March 2020, India's Supreme Court reversed a two-year prohibition on digital currency trading enforced by the Reserve Bank of India.
Last week, RBI governor Shaktikanta Das stated that the central bank had "severe concerns from the standpoint of macro-economic and financial stability," and that blockchain technology can exist without cryptocurrencies.
Conclusion
Cryptocurrency trading is expected to continue under the proposed bill, according to a video report by local news outlet India Today, as long as customers buy from exchanges that meet specific conditions. According to the source, the bill may focus on limiting who is permitted to develop cryptocurrencies in order to protect investors.