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).
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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.
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But as the news of regulation, not ban, came out, markets seem to be stabilising.
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India’s has had a hot-cold relationship with crypto. The RBI had banned it in 2018 voicing “serious concerns” about private cryptocurrencies.
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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.
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According to Blockchain and Crypto Assets Council, India holds about Rs 6 lakh crore in crypto assets.
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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.
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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”.
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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.
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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.