Last week, India’s crypto market was thrown into panic and fear as the wordings of cryptocurrency bill on the list was the same as the previous year. According to Sitharaman, the new Bill, which would be introduced during the current session of Parliament, is not the same as the one from 2019.
However, there is still some confusion as to what the government understands by “private cryptocurrency.” For complete clarification, we’ll have to wait until the Cryptocurrency Bill 2021 is placed into the public domain.
During Question Hour in the Rajya Sabha, India’s finance minister Nirmala Sitharam remarked, “We are on the verge of introducing a bill in parliament. It will be introduced in the House once the measure has been approved by the cabinet.”
She also stated that the risk of cryptocurrency leading to illegal activity is being continuously monitored.
“No decision was made on whether or not its commercials should be banned. However, the RBI and SEBI are taking initiatives to raise awareness “she stated
FM remarked after she told the Lower House yesteday that there is no proposal to acknowledge Bitcoin and that the government collects data on Bitcoin transactions.
There are presently more than 11,000 cryptocurrencies traded across exchanges, according to Edul Patel, CEO, and Co-Founder of crypto investment platform Mudrex. There is a misunderstanding about what the government intends when it refers to private cryptocurrencies. Bitcoin, Ether, and other cryptocurrencies are available on both controlled and decentralized markets. On the other hand, all of these cryptos are produced by developers or companies, not by government.
“The term private cryptocurrencies is interesting because there was news about governments coming up with their own cryptocurrency. These cryptocurrencies are known as CBDCs or Central Bank Digital Currencies. There could be a possibility that these CBDCs are public cryptocurrencies and all others be classified under private cryptocurrencies. However, it will be interesting to see what comes under the ambit of private cryptocurrencies,” Patel told FE Online.
The RBI proposed a Central Bank Digital Currency proposal in October (CBDC).
CBDCs (digital or virtual currency) are the digital equivalents of fiat currencies such as the Rupee in India or the Dollar in the U.S.
The Crypto Bill in a nutshell
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, currently before parliament in the Winter Session, aims to ban all private cryptocurrencies in India. However, it makes exceptions to encourage the underlying technology of cryptocurrencies and its uses.