Ban of Cryptocurrencies in India & the Crypto Bill 2021

In the year 2019, the draft bill was going by the name of “Banning of Cryptocurrency and regulation of official digital currency”. Now, it is interesting to notice that there is no indication of a ban in the bill name. The first part states that there will be a regulation to help RBI to create its own CBDC. It is good that the government has shown intent for a (Central Bank Digital Currency) CBDC and it wants to initiate laws to make it easy for RBI to create its own CBDC. It is believed that the RBI should be given a digital version of INR in sync with how the US, China etc. are trying for their own currencies.

However, the second portion is about banning private cryptocurrencies with some exceptions. Now, the question arises is that, what exactly is a private cryptocurrency? Bitcoin, Ether etc. are public crypto, which is built on public blockchains. The usage of incorrect terms like “private cryptocurrency” or the fact that there is a thought process that states RBI creating its crypto removes the need for other cryptocurrencies is a misleading term that needs to be cleared.

Bitcoin, Ether etc. are the existing cryptocurrencies that have their specific use cases. They are in need of running smart contract and writing to the distributed ledger that they are built on top of. People are not supposed to use INR to pay for fees on the Bitcoin or Ethereum Blockchain. Let the misconception be out the door. In order to operate, every blockchain requires its own native token. In such cases, INR cannot be used.

It is believed that the concern of government here is around the usage of crypto as a payment mechanism or as a “currency”. As an industry, they are in sync with the fact that INR is the only legal tender in India, and if it’s about crypto being an asset or utility, which is being bought or sold by people. But the unclear thing and something that is believed will be in the right direction and it is that – Crypto is an asset and the trading of it will be allowed in India.

As of today, there are over seven millions of people who are owning over $1 billion of digital assets in India. Cryptocurrency is a sunrise sector that employs thousands of people in India. Along with that, there are tens of thousands of influencers in crypto from India.

There are agendas as well as actions. Governments around the world claim that they want to encourage emerging and cutting-edge technology like an AI, ML, Blockchain etc. However, detailed knowledge is needed in order to really make a positive difference and go forward with these technologies. Unfortunately, deep crypto knowledge has not yet been able to be developed by India. This condition is responsible for the lack of regulatory clarification and the aggressive nature of this invention.

The bill is included in the list of bills that are to be presented in this Parliament session if it is presented, then it will be mentioned to a standing committee so that before moving ahead with regulations for this sector, they can hold discussions with the crypto industry of India.

In this revolutionary technology, the right crypto regulation will propel India forward, while incorrect regulations such as a ban on crypto will set our country back by 10 years. In the rest of the planet, we will never be able to catch up and end up missing a golden chance in this market.