Cryptocurrencies in India have been the most trending topic, and it has led to the surge in the crypto market with potential new crypto investors throughout the world. Despite being a highly volatile market, Indian investors are looking for popular cryptocurrencies to invest in. But there is no refusal that Cryptocurrency are here to stay.
India has recently taken a more determined step on cryptocurrencies. The government is eager to bring in rules and regulations in the digital currency sector. On Thursday, November 18, Prime Minister Narendra Modi said cryptocurrencies must not fall into the “wrong hands and spoil our youth”, urging all democratic nations to come together and ensure things like these do not happen. The government and the RBI had recently hinted about floating a strong regulatory control on cryptocurrency to avoid money laundering and terror financing, rather than banning it entirely.
The government is set to introduce a bill to ban private cryptocurrencies and create a framework for an official digital currency to be issued by the Reserve Bank of India (RBI) during Parliament’s Winter Session starting November 29.
India has seen keen interest among investors to invest in cryptocurrency and also many investors already making investments, continues to warn citizens against putting their money on cryptocurrencies citing high financial risks.
Members of Parliament (MPs), industry experts, and associations informed the parliamentary committee on finance that cryptocurrency cannot be banned and the next step should be to find ways to regulate it. The parliamentary standing committee met on Monday to discuss the current status of cryptocurrency in India, opportunities around it, and the challenges for both the government and stakeholders. The panel was headed by BJP leader Jayant Sinha, who is also a former Minister of State for Finance.
According to a government bulletin, the ban is part of the proposed Cryptocurrency and Regulation of Official Digital Currency Bill that will be introduced in its winter session.
The planned legislation aims “to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI)”.
The value of several digital currencies reportedly dropped following the announcement of the bill. Bitcoin fell more than 13% on the Indian exchange site WazirX, while Shiba Inu and Dogecoin both dropped more than 15%.
However, the Reserve Bank of India (RBI) is still not completely convinced about the idea of cryptocurrencies. It has previously been voiced in favor of completely banning cryptocurrencies. Even during the meeting, the Central bank was skeptical of the numbers presented by the crypto-exchange platforms but said other aspects needed to be taken into account, according to a report by Economic Times. Only a few days before the meeting, RBI governor Shaktikanta Das said that cryptocurrencies are a serious threat to any financial system since they are unregulated by central banks.
Also, the majority of the discussion was around ensuring investor protection. The representatives of crypto exchange platforms informed the government that there are nearly 15 million crypto investors in the country who have put in around Rs 600 crore in digital currencies. The MPs said that the security of investors’ money is the most serious concern for all members.
With regards to the regulation of cryptocurrencies in India, policymakers should recognize the difficulties while at the same time embracing a solution-based approach to deal with any regulatory system. In the course of recent years, the Indian government’s situation around crypto has seen different shifts. The first formal limitation on cryptocurrency transactions was advanced by the RBI in 2018. This roundabout kept banks and monetary organizations from empowering exchanges with cryptocurrency platforms and virtual monetary standards. To add to this, in 2019, a Parliamentary board officially advised against managing digital currency and pushed for it to be prohibited.
It is prudent for the government to make the most of the chance introduced and recognize the significant job that cryptocurrency is going to play in the future. The Center and NITI Aayog should get into the demonstration rapidly to foster an empowering system that includes a consistent course of top to bottom examination and partner discussion for regulation of crypto exchange. India should not squander this opportune moment to move towards a dynamic form of regulation that secures customers while guaranteeing ideal development and advancement for cryptocurrencies and the subordinate ventures that will arise around them.