Fresh draft of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 brings regulation not ban, industry sources told NDTV. The crypto stakeholders asked for regulation to keep a check on corrupt practices and there are likely to be amends to the Bill, they added.
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It was learnt on Tuesday that the Centre could bring a Bill in the winter session of Parliament to bar all cryptocurrencies in India, barring a few exceptions, and create a framework to regulate digital currency issued by the Reserve Bank of India (RBI).
In response, all major digital currencies saw a fall of around 15 per cent and more, with Bitcoin down by around 18.53 per cent, Ethereum fell by 15.58 per cent, and Tether down by 18.29 per cent.
But as the news of regulation, not ban, came out, markets seem to be stabilising.
India’s has had a hot-cold relationship with crypto. The RBI had banned it in 2018 voicing “serious concerns” about private cryptocurrencies.
Then the Supreme Court had lifted the ban in 2020 and now in 2021 negotiations are on between industry stakeholders and the Centre to bring in a regulation that will put corrupt practices to check.
According to Blockchain and Crypto Assets Council, India holds about Rs 6 lakh crore in crypto assets.
Last week, the Standing Committee on Finance, chaired by BJP member Jayant Sinha, met the representatives of crypto exchanges, blockchain and Crypto Assets Council (BACC), among others, and arrived at a conclusion that cryptocurrencies should not be banned, but it should be regulated.
Delivering a keynote address at the Sydney Dialogue on November 18, Prime Minister Narendra Modi had urged all countries to ensure that cryptocurrency does not “end up in the wrong hands”.
Private digital currencies have gained popularity in the past decade or so. However, regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks.
Recently, there have been a rising number of advertisements promising easy and high returns on investments in cryptocurrencies, amid concerns over such currencies being allegedly used for luring investors with misleading claims.