The Central government has finally revealed that it will bring a new bill on cryptocurrencies (The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021) in the ongoing Budget session in the Parliament. Finance Minister Nirmala Sitharaman has said that an inter-ministerial committee (IMC) has suggested a ban on private cryptocurrencies in India, like Bitcoin, in India. Additionally, the same committee has pitched for the introduction of an official digital currency that will be appropriately regulated by the Reserve Bank of India.
"A high-level Inter-Ministerial Committee (IMC) constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions to be taken in the matter recommended in its report that all private cryptocurrencies, except any virtual currencies issued by the state, will be prohibited in India," FM Sitharaman said in Rajya Sabha on February 9.
Recently, Minister of State for Finance Anurag Thakur in the Parliament also informed that the government would bring a bill on cryptocurrencies as the existing laws are inadequate to deal with the issues concerning cryptocurrencies.
It must be noted that the Reserve Bank of India (RBI) had banned banks from processing transactions relating to cryptocurrency in 2018. However, the Supreme Court, vide judgment dated March 4, 2020, lifted the ban. Since then, cryptocurrency has been operating in the country.
Now, the RBI has also clarified that it is working on a digital version of the rupee, and results were expected soon. A summary of the bill stated that it sought to "create a facilitative framework for the creation of the digital currency to be issued by the Reserve Bank of India".
Analysts have speculated that the new cryptocurrency bill might impact some existing investors who are already investing in private digital currencies like bitcoin in the country. This is because if the Centre goes by the recommendation of the Inter-Ministerial Committee (IMC) then private cryptocurrencies will be banned in the country which will understandably cause a loss to the existing crypto investors of the country. However, it is still not clear if the new legislation will include Bitcoin or Ethereum under the list of banned private cryptocurrencies.
Speculation is also rife that the proposed cryptocurrency bill may allow holders of such currencies to exit the asset class before its anticipated ban but may put a heavy penalty on its conversion to a legal asset.
Since the detailed provisions of the bill are not yet known, so there's a lot of ambiguity whether those holding Bitcoins or other cryptocurrencies should sell them or not. As per the official estimates, around seventy lakh Indians hold cryptocurrencies worth more than $1 billion
Indian crypto exchanges have been experiencing a flood of INR deposits and surging trading volumes since it was revealed that Elon Musk’s Tesla purchased $1.5 billion worth of bitcoin. The positive sentiment swept the Indian crypto industry despite the uncertainty of the cryptocurrency bill that may soon be introduced in parliament.
Indian cryptocurrency exchanges experienced high deposit volumes recently after Elon Musk’s Tesla revealed that it bought bitcoin. According to the company’s filing with the U.S. Securities and Exchange Commission (SEC), Tesla put $1.5 billion into bitcoin in January and expects to accept payment in the cryptocurrency for its products and services in the near future.
The move caused a massive inflow of orders on cryptocurrency exchanges in India and globally. Sathvik Vishwanath, the CEO of Unocoin
We have seen a sudden uptick in INR deposits and BTC trading volumes on Unocoin since Tesla announcement. The markets in India were not reacting so quickly before, so this should be a very strong trigger this time.
“The INR deposits have more than doubled since the last 18 hours. The number of new registrations in the same time span is what we generally see in a week,” he further shared.
Another major Indian crypto exchange, Wazirx, saw a similar trend after the Tesla news broke. CEO Nischal Shetty told news.Bitcoin.Com: “We saw 3x more deposits in the first few hours compared to other days. Deposits have been on an upward trend ever since
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