There is news on the crypto ban in India where the government may ban all private digital currencies in India and form a structure for an official cryptocurrency that will be issued by the RBI (Reserve Bank of India) during the Winter Session of the Parliament this year. Let us have a look at all the latest news on cryptocurrency in India.
Regulations Regarding Crypto Ban In India
A Lok Sabha notice that was released on Tuesday asserted The Cryptocurrency & Regulation of Official Digital Currency Bill, 2021, will
“allow for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
RBI asserted in July that it was operating towards forming its own digital currency and the CBDC (Central Bank Digital Currency). RBI deputy governor T Rabi Sankar said,
“A CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies that have mushroomed over the last decade. Private virtual currencies sit at substantial odds to the historical concept of money.”
India, which has shown great interest among investors to invest in digital currency and also many investors are already making investments, prevails to warn the citizens against putting their money on digital currency claiming it to have high financial risks.
The Prime Minister of India, Narendra Modi held a meeting to talk about the future of digital currencies earlier this month and he also warned against digital currencies falling in the wrong hands. The Centre also spoke about the fact that it is planning new alterations in the income tax laws in a bid to bring digital currency gains under the tax radar and also to present them during the next year’s Union Budget.
The RBI has on various occasions emphasized that it feels digital currencies like Ethereum, Bitcoin, and Dogecoin among many other cryptos pose a risk to financial stability and also interrogated its claims of market value while questioning investors to not get attracted by the promises of returns on digital currencies.
However, the Supreme Court of India canceled the RBI circular on the crypto ban in India in 2020 and also set aside a circular of RBI of April 6, 2018, stopping entities and banks regulated by it from offering services with links to digital currencies in March 2021.
Now you may wonder is cryptocurrency legal in India 2021. Cryptocurrency in India was neither banned nor was it termed as a legal tender by the government.
Raghuram Rajan On Crypto Ban In India 2021
According to the former governor of RBI, Raghuram Rajan, most of the cryptos that are presently operating will perish in some days. Only a handful among them would live. He said,
“If things have value only because they will be pricier down the line, that’s a bubble,” he told in an interview. A lot of cryptos have value only because there is a greater fool out there willing to buy.”
He compared the present fad in digital currencies to the Netherlands Tulip Mania of the 17th Century. He said,
“Cryptos may pose the same problem as unregulated chit funds, which take money from people and go bust, a lot of people holding crypto assets are going to be aggrieved.”
He further added that it was not as if cryptos had no value but most of them do not hold any permanent value. Also, some among all the cryptos would survive to offer payments, especially the payments that take place cross border. He added that,
“In the US, crypto is a $2.5-trillion problem that nobody really wants to regulate.”
In the case of India, Rajan said, the Centre must enable the underlying blockchain technology to rise. Transacting with the blockchain technology was much cheaper, especially if used across borders, he exclaimed.
There are chances for the government to table a Bill in the winter session of Parliament, that is scheduled to start from November 29, for the crypto ban in India but except a few private cryptocurrencies in India and design a structure to control a virtual currency that will be issued by the RBI.
As per the latest news, there may be a crypto ban in India where the private digital currencies may be banned and the government is planning to design a framework for the Central Bank Digital Currency that will be issued by the RBI. All these decisions will be placed in the winter session of parliament. With a crypto ban in India, there will also be a Bitcoin ban in India which is the largest digital currency in the world. Now the citizens await to see what is the future of crypto in India. Whether there will be a banning of cryptocurrency bill, 2021 or will the bill be passed successfully. The cryptocurrency ban in China changed the market, what will be the case for India? The winter parliament has lots of questions to answer.