India sows confusion with plan to ban ‘private cryptocurrencies’

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Prime Minister Narendra Modi’s government on Tuesday said it was preparing to introduce a bill that would regulate digital currencies.

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Much is still unknown about the proposal. A cryptic description of the bill posted on the website of the Indian Parliament outlines plans to “ban all private cryptocurrencies in India”. But the bill also says it will allow “Some exceptions to the promotion of cryptocurrency and the underlying technology of its use.”

According to a notice posted about the draft law, the Modi government also wants to help the country’s central bank, the Reserve Bank of India, make an official digital currency.

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That language leaves a lot of room for interpretation. The bill did not specify what “private” cryptocurrencies meant, so it is unclear whether this applies to the world’s most traded coins, including bitcoin and ethereum. India’s finance ministry did not immediately respond to Granthshala Business’s questions about the bill.

The proposal will be tabled in Parliament in the session starting Monday.

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history of stress

This is not the first time Potential restrictions on digital currencies have ranked crypto traders and investors in India, One of the fastest growing economies of the world.

In 2018, the central bank banned Indian banks from dealing with cryptocurrency exchanges, citing “consumer protection, market integrity and money laundering concerns, among others”.

Two years later, India’s top court lifted that ban. But investors continue to worry that the Modi government – which compared cryptocurrencies to “ponzi schemes“- can bring down the hammer. In March, Reuters Citing unnamed sources, the government is planning to “impose fines on anyone doing business in the country or even holding such digital assets”.

No such fine has been imposed so far. and some of India’s top government officials While discussing such properties, a soft stand has been taken.

NS Finance Minister in March Said that “we are not closing all options” and the country will “allow a certain amount of window for people to experiment on blockchain and bitcoin.”

Anirudh Rastogi, founder of tech law firm Ikigao Law, told Granthshala Business that the government is wary of cryptocurrencies as it can be used for money laundering and tax evasion. Government There are also concerns about the impact on investors.

“Some of these coins could be quite scams,” said Rastogi, whose firm represents cryptocurrency exchanges. During the Supreme Court case that challenged the 2018 decision of the central bank. “But by imposing an outright ban, India will keep pace with important global tech and business developments in blockchain.”

popularity in india

virtual currencies are attractive to Indians. While the government does not keep an estimate of how many people trade cryptocurrencies, media report Citing industry experts, it is suggested that there could be 20 million crypto investors in the country.
this year, At least two crypto exchanges With funding from heavyweight investors like Andreessen Horowitz and Coinbase Ventures – a term used for startups worth more than a billion dollars – has achieved unicorn status. These platforms have also worked in some Bollywood s The biggest actors promoting bitcoin in TV and newspaper ads.

Some crypto experts acknowledge that there is a need for regulation in India – it is about striking the right balance.

“Do not panic,” tweeted Cryptocurrency platform WazirX founder Nischal Shetty after the announcement of the new bill. “We all want regulation. We have been pushing for it for the last 1,000+ days.”

“We need to have faith in our lawmakers. There will be discussions and deliberations.” she added. “Ultimately, innovation will triumph.”

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