Another known for cryptocurrencies with notorious price swings, comes amid news that the Center is set to introduce a bill in Parliament that seeks to crack down on these unregulated assets in India, which has the world’s largest crypto currency. -Ownerships are the basis. , The Center has long clarified its warnings about cryptocurrencies, even as the RBI announced plans to launch its own digital currency. Here’s what you need to know about the crypto landscape in India.
how many people own cryptocurrency in India?
According to industry resources, over 100 million Indians, mostly young people but also senior citizens, have invested in cryptocurrencies. The country is said to have approximately 10.07 million cryptocurrency owners, which puts it ahead of the US, although it is estimated that it will overtake India on the total value of the holdings.
Crypto research firm CREBACO says that total investment in cryptocurrencies has exceeded USD 10 billion at the end of 2021, from slightly less than USD 1 billion in April 2020.
As news of the crypto bill being drafted into law emerged, major cryptocurrencies such as bitcoin, ether, etc. recorded a significant drop in value, although the development was particularly linked to its proposed tabled during the upcoming winter session of parliament. was not. ,
What are the concerns over cryptocurrency?
Addressing a virtual meeting of the Sydney Dialogue – a forum focused on emerging, critical and cyber technologies – in mid-November, the Prime Minister Narendra Modi He had said that all democratic countries should work together to ensure that “it does not fall into the wrong hands, which can spoil our youth”.
Earlier, the Prime Minister had chaired a meeting that raised the issue of cryptocurrencies, where it was noted that unregulated crypto markets can be used for money laundering and terror financing, while heavily on cryptocurrency investments. Concerns were also expressed over misleading claims of returns.
Sources had said that the practice of luring investors, especially the youth, with advertisements that promised profits and hid risks, was also flagged off in the meeting.
What is the Official Stance on Cryptocurrencies in India?
Reports suggest that the cryptocurrency bill missed being tabled in Parliament during this year’s budget and monsoon session, while Union Finance Minister Nirmala Sitharaman said in July that the wait was only to see “when the cabinet can take it up”. and consider it so that then we can move it”.
Glossary of the Bill as listed in legislative business remained the same for the winter session, adding that it seeks to “create a facilitating framework for an official digital currency to be issued by the Reserve Bank of India…” and also seeks to “ban all private cryptocurrencies in India”. tries. But the bill allows “promotion of cryptocurrency and the underlying technology of its use” for certain exceptions.
Reuters news agency quoted an unnamed government source as saying during the budget session that the bill would “represent one of the world’s strictest policies against cryptocurrencies (and) the possession, issuance, mining, will criminalize trade and transfer”. said that in such an event, investors would be given a window to settle their crypto holdings after which fines would be imposed.
But the same story noted that investors had read encouragement in the finance minister’s remarks that the government was looking at “the digital world and how experiments could take place in cryptocurrency”. “I can only indicate to you that we are not closing our minds,” she told CNBC-TV18, adding that “a very calibrated position will be taken”, on the cryptocurrency.
Following its list to be presented in the winter session, sources in the security establishment said the government was not going for an “outright ban” and that regulatory mechanisms would be put in place to prevent misuse of cryptocurrencies. But cryptocurrencies, he said, would not be recognized as legal tender because it would be dangerous to the country’s fiat currency and taxation system.
How is cryptocurrency trading possible in India?
In response to a question in Parliament during the last budget session whether there was a ban on “Bitcoin trading in the country”, the Union Finance Ministry cited a Reserve Bank of India (RBI) circular from April 2018 which advised ” Not all entities regulated by it are to deal in “virtual currencies”. However, it was noted that the Supreme Court had set aside the RBI circular in its 2020 judgment. This means that Indian investors are able to trade in the cryptocurrency.
But despite the apex court’s order, several private and public banks had continued to discourage their customers from dealing in cryptocurrencies, citing the original RBI circular originally issued. It clarified to the central bank last month that banks cannot cite that circular for denial of services for cryptocurrency-related transactions.
“In view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the judgment of the Supreme Court, and hence cannot be quoted or quoted,” RBI said.
Why are governments wary of cryptocurrencies?
Many countries around the world Banned Cryptocurrencies, which also includes China, which had emerged as a major player in the cryptocurrency mining space. Most governments are concerned that unregulated digital currencies will undermine the prerogative of central governments to issue fiat currency and regulate monetary policy, even as cryptocurrencies become a conduit for tax evasion and transferring money out of their jurisdiction. Go.
In form of Finance Ministry It was reiterated in Parliament in August this year, “The Government does not consider cryptocurrencies to be legal tender or coins and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of a payment system.” will do”.
It was noted that a high-level inter-ministerial committee set up to go into issues related to virtual currencies had recommended that “all private cryptocurrencies, except any state-issued cryptocurrency, be banned in India” but the ministry Said that the government would “actively use it to explore the use of blockchain technology”.
digital economy. Blockchain is the distributed ledger system that anchors cryptocurrency offerings. Governments and corporates are reported to be exploring their potential to transform many sectors.
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