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India’s crypto investors are nervous after the recent revelation of a government-backed bill that could have far-reaching effects on the country’s entire cryptocurrency industry. Reports surfaced last week that the government plans to ban private cryptocurrencies such as Bitcoin (BTC) and Ether (ETH).
Members of India’s crypto community were caught off-guard when news broke Friday, January 29, that the country’s Parliament will be considering a bill described to be anti-private cryptocurrency in its next budget session, according to Coindesk. The report added that there’s a good chance that the bill would be passed into law since India’s ruling party control both houses of Parliament.
The “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” aims to provide the framework for the creation of the country’s central bank-issued digital currency, which will be issued by the Reserve Bank of India (RBI), according to CNBC. Unfortunately for the country’s crypto investors, the proposed bill also seeks to bay other digital currencies.
A brief introduction of “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,” which was published by Lok Sabha Bulletin on Friday, said that the bill moves “to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. 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.”
While the introduction did not explain what the government meant by “private cryptocurrencies,” there are concerns that it could imply any cryptocurrency not issued by a government including Bitcoin and Ether. It was not also clear based on its introduction which cryptos are considered exceptions.
As expected, the proposed bill became a cause of concern for India’s crypto investors. “This is (the) time to be nervous,” an unnamed official at a large cryptocurrency exchange told Economic Times of India.
The official explained that there’s a lot to look forward to in crypto since, unlike the retail investor-driven frenzy of 2017-18, the market’s current rally is mainly driven by the increased participation of institutional investors and platforms such as Square and PayPal. “There is lot of positivity around crypto now and I hope this (bill) will not get passed as it is for now,” the official added.
“A country as large as India should at least work on understanding the underlying terminologies before presenting technology-related bills in Parliament – seems like a hurried move,” Wazir CEO Nischal Shetty criticized the announcement on Twitter. “If done wrong, this can potentially destroy lot of value held by the general public.”
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