The Indian government announced its plans to ban cryptocurrencies on Tuesday (23rd November). The government also stated that it intends to launch a digital coin that will be governed by the Reserve Bank of India (RBI).
The government has stated that the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 will be used to implement the changes. The law is scheduled to be introduced in parliament during the Winter Session, which begins on November 29.
Key Takeaways – Will Cryptocurrency be Banned?
- After the administration declared that it will propose a cryptocurrency bill in Parliament’s winter session, which will restrict all private cryptocurrencies in the country, most crypto valuations plunged by 15 percent or more.
- All major cryptocurrencies were down around 15% or more as of 11:45 p.m. on November 23, with Bitcoin down around 17%, Ethereum down 15%, and Tether down over 18%.
- The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 aims to develop a framework that will make it easier for the Reserve Bank of India to create an official digital currency. The bill aims to ban cryptocurrencies in the country, with some exceptions made to promote the underlying technology and its applications.
- The crypto law, which intends to govern digital currencies, will be submitted in Parliament during the upcoming winter session, which begins on November 29. According to a government statement released on Tuesday, the bill is one of 26 that have been scheduled for introduction.
- Last week, India’s 1st Parliamentary committee meeting on digital currencies concluded that while cryptocurrency cannot be prohibited in India, it must be monitored.
- On November 16, a BJP’s senior member presided over a meeting of the standing committee on finance, which included members from crypto exchanges, industry organisations, and other stakeholders.
- On the subject, the Prime Minister convened a high-level conference with officials from various ministries and the Reserve Bank of India (RBI). The PM urged democratic nations to work together to regulate private virtual currencies, warning that they could end up in the “wrong hands” if they are not regulated.
- In a statement addressed at the Sydney Dialogue last Thursday, the Prime Minister said it was vital to ensure that cryptocurrencies were not used illegally, as this may hurt the youngsters.
- The Reserve Bank of India has been hesitant to adopt cryptocurrencies, citing potential threats to macroeconomic and financial stability, as well as capital controls. The Securities and Exchange Board of India (SEBI) is likewise concerned about the uncontrolled development of digital currencies in India, with a special emphasis on the country’s susceptible retail investors.
- RBI Governor Shaktikanta Das said last week that India needed to have far more in-depth discussions about cryptocurrencies. “When the central bank declares that there are major worries about macroeconomic and financial stability, it is implying that there are far more serious issues at hand. I have yet to witness serious, well-informed debates on these topics in the public sphere,” Das has stated previously. Bitcoin was recently trading 16.91 percent lower versus the rupee, at 38,76,950 rupees, while Ether was down 14.58 percent at 2,92,897 rupees.