Indian cryptocurrency investors were taken by surprise on Friday when news broke that the country's parliament will consider a government-backed bill that would ban "private" cryptocurrencies. Given that the ruling party controls both houses of Parliament, the chances of the bill becoming law are high.
Nervousness Among Crypto Investors Over Indian Bill
In addition to a ban on cryptocurrencies in India, the new 2021 bill would provide a framework for creating an official digital currency issued by the Reserve Bank of India (RBI). The RBI had previously banned cryptocurrency trading for nearly two years before that ban was overturned by the Supreme Court in March 2020.
Industry observers have argued that the government's definition of "private" could imply that any digital currency that is not sovereign could be seen as a "private" currency, including bitcoin (quotation BTC).
Currently, it is unclear which cryptocurrencies would be affected as the law would allow some unspecified exceptions to promote the underlying technology of the cryptocurrency and its uses. "This is the time to be nervous," an official at a large cryptocurrency exchange told the Economic Times of India asking to remain anonymous. The move is set to make potential and current cryptocurrency investors outside the country nervous as well.
The big world economies against Bitcoin
Last week, while appearing more positively disposed towards bitcoin than ever before, Ray Dalio, founder and co-chair of Bridgewater Associates, the world's largest hedge fund, listed the government's ban on bitcoin as one of his concerns. biggest on cryptocurrency.
What emerges is that the largest economies in the world seem ready to feed only that narrative. News of India's likely ban may have been a contributing factor to bitcoin's price drop on Friday, after it rose in response to Elon Musk's Twitter shoutout.
Nischal Shetty, CEO of Mumbai-based cryptocurrency exchange WazirX, criticized the Indian bill on Twitter, explaining that "there is no private cryptocurrency" and the bill aims to help the RBI create its own central bank. digital currency (CBDC) by banning so-called private cryptocurrencies with some exceptions.
“A large country like India should at least work on understanding the underlying terminology before submitting technology-related bills in Parliament. It seems like a rushed move, ”Shetty said.
Adding that just because a bill is presented doesn't mean it will be approved and enforced, “wrong or hasty regulations will set us [India] back a decade. The right regulations, on the contrary, will catapult India to the forefront of this technology ”. If the bill becomes law, India would become the only major Asian economy to ban private cryptocurrencies rather than regulate them as corporate stocks.
