Is India set to ban crypto currencies? It’s a bit unclear for now
Crypto currencies on Indian crypto exchanges tanked on 23 November 2021 after it came to light that Parliament will see the introduction of the much-delayed crypto currency bill at its winter session that will commence on November 29 and is expected to continue till December 23.
The official bulletin said: The Crypto currency and Regulation of Official Digital Currency Bill, 2021, India aims to create a framework for the official digital currency that will be issued by the Reserve Bank of India.
So far okay. But it is the second part of the official announcement that has truly set the cat among the pigeons. It read: “The Bill also seeks to prohibit all private crypto currencies in India. However, it allows for certain exceptions to promote the underlying technology of crypto currency and its uses.”
So what are private crypto currencies? Aren’t all of them private? So, is India planning to strike down all crypto currencies a la China that banned them en masse early this year?
It has naturally triggered an avalanche of speculation, and this is one of the reasons crypto currencies took a beating last evening.
India’s approach to crypto currencies, like its many moves on the economy, has been confusing. There have been many conflicting signals from it over its official position on digital tokens even as they met with enormous growth at the grassroots level.
India has now reportedly emerged as one of the biggest crypto currency markets — — there are over 20 million Indians who are said to be dabbling in crypto currencies. No official data is available but industry estimates say that the total crypto currencies in India are around INR 40, 0000 million.
Further, there have been reports about typical fly-by-night operators scamming the system. And one of the reasons trotted out was that the ‘the entire crypto currency ecosystem is unregulated’.
So the Indian government -historically known to be parental in its control -turned its gaze towards crypto currencies. The complexity probably was too much for it. Reports emerged last year that the government was planning to ban all crypto currencies. It was even said it will introduce a bill during this year’s Budget session (February-March) to take out the crypto currencies.
As it happened, the Bill was scrapped, and a committee was formed to discuss the matter further with the stakeholders. Since then, the signal from the government was that crypto currencies can co-exist with the Indian rupee, but will be regulated.