India has a history of issues with cryptocurrencies; the trend has been on for some time now. The parliament is considering a bill dubbed Digital Currency Bill 2021. It is backed by the government to ban all private cryptocurrencies. The probability for the bill to be passed is high since there is only one controlling party in the country. This has made investors anxious as they do not know what their fate will exactly be.
From the bill, cryptocurrencies will be banned in India. In line with this, the Reserve Bank of India (RBI) will come up with its digital currency, which will be the only one allowed to operate. India has been having a shaky relationship with the crypto ecosystem since it gained popularity in 2017. Initially, RBI has banned crypto trading for about two years, which the Supreme court revoked in March 2020. The reason behind this was crypto is associated with money laundering, terror financing, and illegal activities.
What is causing the anxiety?
The term private cryptocurrencies raised eyebrows as it may mean any currency that has no backing from the government. The bill was not clear which specific digital currencies will be affected. Contrary to expectations, there are exceptions to promote general cryptocurrency technology and its uses.
The unspecified conditions are what sparks nervousness among investors. This will not only affect investors in the country but also those out of the country. Even though BTC (Bitcoin) is big and unshakable, it will also be affected in a way or another as India has many BTC (Bitcoin) users.
According to Nischal Shetty, the CEO of WazirX, one of India’s biggest crypto exchanges, the bill promotes the RBI digital currency by banning other cryptocurrencies. In his opinion, India should have a clear understanding of the technology before creating similar technology-related bills.
The bills of a country affect the development of a nation, and India is not an exception. Even though there are high chances that the bill will be effected to law, there is a slim chance that it will not become law.
When the bill becomes law, India will be a pioneer in Asia to ban cryptocurrencies and lag it tech-wise.
Crypto in India
There are many Indians that are aggressive in the adoption of the crypto space. WazirX and Zebpay are the largest exchanges and have been growing steadily in user registrations and trading volumes. WazirX is the largest platform, with over 1 million new users.
The increased interest in BTC (Bitcoin) and cryptocurrencies are due to the high performance, especially since the pandemic struck. The current rallies going on have made many to be interested in partaking in the profit shares. BTC (Bitcoin) alone has increased by over 700%, with other cryptos also improving their performance. The high interest is from retail investors and institutional investors, and other platforms embracing cryptocurrencies such as PayPal.
Just like India, many governments are concerned about cryptocurrencies promoting money laundering and illegal activities. Even though measures are taken, such as KYC to cap money laundering, still have a long way before many governments are confident in fully embracing the space.
Many countries are working on regulatory measures to deal with cryptos as they are here to stay. Countries in the EU, the US, Canada, have legal and regulatory standards to be adhered to.