If cleared by parliament, the Blockchain and Enforcement of the Official Digital Currency Bill, 2021, would place a blanket ban on corporate and individual cryptocurrency transactions.
The bill is expected to be set in motion before Parliament’s current budget session.
In May 2018, the RBI instructed all entities controlled by it through a circular not to trade with virtual currencies and not to provide individuals dealing with them with any facilities.
In May 2018, the RBI instructed all entities controlled by it through a circular not to trade with virtual currencies and not to provide individuals dealing with them with any facilities.
However, in March 2020, the Supreme Court overturned the circular authorizing banks of the RBI to manage crypto transactions from individuals, companies, or some other organization.
As there are no other countries around the world who have expressed the aim of banning virtual currencies outright as a tactic to preserve economic prosperity, this bill comes as a daring leap.
There is no question that the modern medium of digital currency has raised numerous obstacles to the current financial system, while at the same time illuminating the prospect of monetary system privatization around the world. This is a danger to the growth of the economy, according to some economists. “Regulatory bodies such as the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) do not have a legal framework to directly regulate cryptocurrencies in Parliament, as they are neither currencies nor securities or commodities issued by an identifiable user,” said Minister of State for Finance and Corporate Affairs Anurag Thakur.
Thakur further claimed that the current laws are inadequate to deal with this matter and that the government has appointed an inter-ministerial council.
A report was presented by this body, which would be accompanied by a meeting of the empowered technology community. The Secretaries’ Committee has already sent its draft, and the bill is now being finalized before it is sent to the Cabinet,’ said Thakur.
Crypto currency trading has seen a massive rise of over 310 percent in 2020 with bitcoin being the most common (valued around INR 34,33,476.81) Crypto experts have given the good news to Indian crypto investors that they would still have the choice of foreign exchange to trade their shares even though the ban is enforced and there would be no money loss. The analysts have, however, cautioned that the ban would drastically affect the value of crypto currencies as it would have a direct effect on the demands. It could therefore be a smart step for Indians to trade their crypto holdings as quickly as possible to brace for the imminent entry into force of the ban and their immense losses in terms of their holdings.
An approximate 70,00,000 Indians have more than $1 trillion worth of crypto deposits.
Kevin Lim, Assistant Professor of Economics at the University of Toronto, argues that a ban on cryptocurrencies would merely suggest a ban on the use of cryptocurrencies in real-world transactions for the exchange of goods and services and on the transfer of value between persons.
It will mean that holding and selling crypto as an investing transaction would be completely legitimate for individuals.
