Is India set to ban cryptocurrencies? It's a bit unclear for now

Date:
Wed, 24 Nov 2021 07:47:40 +0000

Description:
The long-awaited cryptocurrencies Bill will be taken up during the Winter Session of Indian Parliament. So what is in store for digital tokens?

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Crypto currencies on Indian crypto exchanges tanked yesterday after it came
to light that Parliament will see the introduction of the much-delayed cryptocurrency bill at its winter session that will commence on November 29 and is expected to continue till December 23.

The official bulletin said: The Cryptocurrency 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 cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

So what are private cryptocurrencies? Aren't all of them private? So, is
India planning to strike down all cryptocurrencies 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 cryptocurrencies took a beating last evening. Teenage hacker used SIM-swapping to steal millions in cryptocurrency Paytm open to Bitcoin offerings if India makes cryptocurrency legal Indian and cryptocurrencies: A mixed bag

India's approach to cryptocurrencies, 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 cryptocurrency markets --- there are over 2 crore Indians who are said to be dabbling in cryptocurrencies. No official data is available but industry estimates say that the total crypto holdings from India is around Rs 40,000 crore.

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 cryptocurrency ecosystem is unregulated'.

So the Indian government --- historically known to be parental in its control --- turned its gaze towards cryptocurrencies. The labyrinthian complexity probably was too much for it. And out emerged the report last year that the government was planning to ban all cryptocurrencies. It was even said it will introduce a bill during this years Budget session (February-March) to take
out the cryptocurrencies.

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 cryptocur