India plans to introduce a new law regulating the industry this coming winter to ban most crypto assets.
The agenda for the session lists “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.” The bill also addresses the framework of the official central bank digital currency to be issued by the Reserve Bank of India.
India is now following in China’s footsteps, seeking to scrap decentralized, encrypted assets and instead support its own state-controlled CBDC.
“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.”
This is the second time the cryptocurrency bill has entered the parliamentary list, but it was not proposed earlier this year.
Crypto Community in India Responds
India has a population of around 1.4 billion, most of whom do not have a bank account. Hence, cryptocurrency has become very popular in the country in recent years, but the country does not endorse it.
There are around 1.5 to 20 million cryptocurrency investors in India, according to Reuters, and the total cryptocurrency inventory is around 400 billion rupees, or around $5.4 billion, so this is obviously a huge market.
As expected, both users of cryptocurrencies and politicians expressed their opposition to this step. Councilor Priyanka Chaturvedi called it a “recipe for disaster,” adding that it robs India of its ability to create an ecosystem for the new era of fintech.
Nischal Shetty, founder, and CEO of WazirX, India’s leading cryptocurrency exchange, stated that both parties are speculating and then added that the good news is that more people in government understand how cryptocurrencies work.
The Prime Minister’s Office, Narendra Modi, posted this rather obscure encrypted comment on Twitter on November 18th.
“Take crypto-currency or Bitcoin, for example. It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth.”
At the same time, Reserve Bank of India Governor Shaktikanta Das continued to express his worries stating, “when the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are far deeper issues involved,” at a recent event.