With over 2 crore crypto investors who have invested a whopping 10 billion dollars worth of the economy, right now, there’s a dark cloud over the crypto-system amid the possible inclusion of a crypto bill by the Government of India. A topic of a bill on regulating cryptocurrency has been making rounds for several weeks, with still a lot of uncertainties regarding what would be permitted and what would not.
Implementation of a bill wouldn’t cause many changes in the global crypto economy since the system of crypto isn’t just limited to the geographic region of India but also on a worldwide scale. With any kind of bill regulating cryptocurrency, it would instead setback the system of startups that are blooming in India. A lot of startups have invested in cryptocurrency and are dependent on it for its monetary income to function properly as an entity in society. With the government’s main objective to regulate the flow of the economy and control the illegal trades, which are all-time high now and steadily increasing, we also can’t conclude, already, that the crypto bill is unnecessary or unwanted, considering the main objective and goal of the crypto bill in the first place.
A body to govern and bring down the illegal trades must be implemented to prevent innocent people or naive traders from losing a lot of money to crypto, due to the hype around holding a cryptocurrency. As we already know, the entire system of crypto itself has no body or entity to monitor or to regulate, it’s unpredictable on the future outcomes. The government’s objective is to also prevent the economy from pouring into terrorism or illegal activities that can compromise the security of the nation. We can’t eliminate the possibility of having a crypto bill that would prevent such investments into unlawful activities but can be controlled to some extent.
With over-promising advertisements by few organisations and non-transparency over the crypto market, the government stringently felt such attempts to lure the youth should be stopped. With improper knowledge and haste, a large section of the youth community has been investing in cryptocurrency with no proper prerequisite knowledge and exposure but instead are just making attempts to join the bandwagon for the hype around holding a cryptocurrency.
With the Parliamentary Standing Committee on Finance having discussed the pros and cons of the crypto market with various stakeholders and investors, several expressed their side in favour of regulating the cryptocurrency exchanges rather than a total ban on such currencies. These included BACC (Blockchain and Cryptos Asset Council), CII (Confederation of Indian Industry) and ASSOCHAM (Associated Chambers of Commerce and Industry of India).
This is a good sign for crypto exchanges and lovers for two reasons, had the government been on the staunch opinion to ban cryptocurrencies, they would not have entertained talks and discussions with the crypto committee. Second, the government has a decent interest in launching its digital currency which would be backed by fiat currency and monitored by the central bank — the RBI reserve bank of India). This shows that the immediate ban is not to be assumed. There has been a discussion going on for quite a few days in the past week, and also multiple times in the last 5 years. Two more things to notice here is that these discussions are happening after the entire world’s economy was traumatised due to the COVID-19 pandemic. If the government found this as a threat to the existing economy, this discussion would have never been entertained by the Ministry of Finance. Second, the present government supports bringing the entire nation under one digital finance umbrella. All these factors are keeping the hopes of pro-cryptocurrency high. Finally, something that’s not to be forgotten, the entire revolution of pay money online, pay from your smartphone, and go cashless was encouraged by the current government itself.
The discussion also leads to talks around scrutinising private cryptocurrencies. There are still glooms around what does the government panel means by private cryptocurrencies. These could mean:
- A digital currency that is not regulated by RBI or GOI.
- A digital currency that is not regulated by any nation’s government in the entire world.
- A digital currency that is not backed by a fiat currency like USD.
- A digital currency that is not backed by gold or similar commodities.
As far as these definitions are not set or defined by the government, it is difficult to predict the future of cryptocurrencies or exchanges.
With the bill being pushed slowly into the scene with two main objectives, we can’t possibly argue that a crypto bill is going to be a loss for the investors. The bill is being proposed as the main idea to reduce the organisations that are luring the youth into over-promising situations in return for money and also to regulate the flow of the economy to avoid and block investments into unlawful activities. It would be a loss to investors who are specifically indulged in investing economy into unlawful activities such as terrorism, trafficking or any activity that brings a threat to the life of an individual or a country by choosing cryptocurrency as a channel of the flow of economy from one end to another end.
This isn’t the first time that rounds of a crypto bill are going around. This has happened previously when Rakesh Jhunjhunwala expressed his concerns over uncertainties of cryptocurrency and suggested the regulatory body ban cryptocurrency in India.
“The power to issue currencies should only be with the state and it should be taken away from others. The biggest sovereign right is to issue currency. The regulator must ban cryptocurrencies in India,” he said.
Many such influential personalities have also expressed their concerns and worries regarding the high volatility function of crypto and it still being expressed as a currency or a mode of payment has raised a lot of eyebrows. A body to govern the flow of crypto has always been raised as a demand but the global presence has made it incredibly hard and challenging how and who would monitor and regulate the cryptocurrency. It would be quite challenging to even imagine how a body would be formed. If by chance a regulator body is formed, the responsibilities and duties of such bodies are painstakingly high due to the global presence of crypto investors all over the globe. This isn’t the end. Several thousand new investors are joining the crypto ecosystem every day. The ever-increasing number of investors makes it incredibly hard for a body to control and regulate the complete ecosystem of cryptocurrency.
In the worst conditions, what to expect if a ban is imposed?
All kinds of transactions that take place between your bank and crypto exchanges would eventually be stopped and users would not have a choice to either have a fresh investment or liquidate the already existing investment. But an immediate ban is very unlikely to happen due to the presence of over 2 crore crypto investors in India. It is expected that a period shall be provided to everyone by the government during which investors would be able to sell and liquidate their investments made in the cryptocurrency. After which, all kinds of transactions related to cryptocurrency would be banned and completely stopped.
With the winter session approaching us soon, there isn’t much time to completely research what to expect from the crypto bill until the complete details of the bill are published on a public platform. The inclusion of opinions and suggestions of several stakeholders and investors are being taken into this decision regarding the bill as it has a wide-scale effect on the entire cryptocurrency market of India. This also
houses 10 billion dollars worth of crypto. With time, we shall soon know the complete details of the bill that’s being proposed to regulate cryptocurrency.
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