Indian Crypto Industry Reacts as Government Presents Bill to Ban Digital Assets
- The Indian government has presented new draft legislation that could shut down the crypto sector in the country. While some industry players are preaching calm, the market hasn’t taken the news so well.
- Cryptocurrency enthusiasts in India were filled with hope last year as the country seemed to be on the pathway towards accepting digital assets once more.
Sadly, this year has come with a jolt of reality, showing that all the progress of 2020 was essentially fruitless.
Yes to a CBDC, No to Private Cryptos
Earlier this year, the Lok Sabha Bulletin confirmed that the Indian government had introduced a new draft regulation that will see the country ban all private cryptocurrencies in the country. The legislation titled the “Cryptocurrency and Regulation of Official Digital Currency Bill” is set to move to India’s parliament's lower house in its next session.
The bulletin shows that the Indian government’s approach will be two-pronged. It plans to develop a framework for the creation of a Central Bank Digital Currency (CBDC).
However, it is also looking to ensure that no private cryptocurrency competes with the asset when it launches. The government acknowledges the numerous use cases of blockchain technology, which is why it plans to integrate the CBDC into its financial system.
A booklet on payments from the Reserve Bank of India also explained that it was looking to explore CBDCs and their feasibility in the Indian economy.
Back to Square One
While the news of India’s government pushing for a possible CBDC should have been a welcome development on its own, the crypto ban had led to panic across the country. The Economic Times reported that the price of Bitcoin on local exchanges tumbled by 20 percent, signifying what could have been a sporadic selloff. Sathvik Vishwanath, chief executive of cryptocurrency exchange Unocoin, said to the news source,
“The Indian crypto industry is in a panic right now, based on the price movements I see on exchanges… The news that the government will consider a bill is not new. However, this is not something that can be taken lightly. Efforts have been taken to keep the relevant parties informed.”
As Vishwanath explained, this isn’t the first time that there will be rumors of another crypto ban in India. Now that the government’s stance on digital assets is clear, it appears that industry insiders might have no choice but to stand by and see what happens.
However, some aren’t hitting the panic button just yet. Speaking to industry news sources, Nischal Shetty, the founder, and chief executive of top exchange WazirX, explained that the government would most likely be unable to jam its proposed bill into law without input from industry players.
As Shetty explained, the government will most likely have to go through several parliamentary committees before passing the bill. These committees will open discussions and invariably ask for input from industry insiders as well.