wordpress blog stats
Connect with us

Hi, what are you looking for?

All the signs that suggest India’s crypto bill won’t ban cryptocurrencies outright

Crypto investors in India are in meltdown mode due to an inkling of a blanket ban; here’s why that’s unlikely.

The government has listed the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 for introduction during the winter session of the parliament, which will start on November 29. On the Lok Sabha agenda, the purpose of the bill remains unchanged from when it was earlier listed in February this year:


We are discussing crypto regulation trends with our subscribers this week. Subscribe to MediaNama to attend this session.


To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses. (emphasis ours)

The unchanged description has caused many crypto investors in India to panic, and prices of all major cryptocurrencies have plummeted after the agenda was circulated. Developments over the past few months, however, strongly indicate that the crypto bill will not seek to ban major cryptocurrencies.

What we know about India’s approach to crypto regulation

The internet is currently abuzz with speculation around the term ‘private cryptocurrencies’. We don’t know if it refers to privately-held cryptocurrencies, the use of crypto assets as currencies (i.e. payments), or just all cryptocurrencies that aren’t controlled by the RBI. The government’s statements and discussions with stakeholders, however, indicate that the bill is not likely to entail a blanket ban on cryptocurrencies:

  • Permitted as an asset, not a currency: India’s crypto law will regulate cryptocurrencies as assets but their use as currencies for payments might be barred, sources told the Economic Times on November 17. “The government is finalising legislation that will pave the way for regulation of crypto asset trading while barring the use of virtual currencies for payments and transactions,” the ET report said.
  • Optimistic Meeting with Prime Minister: In a meeting with the Prime Minister earlier this month, sources said that “there was a consensus that steps taken in this field by the government will be progressive and forward looking,” NDTV reported. After the meeting, crypto exchanges also agreed to curb crypto advertising due to concerns regarding investors being misled.
  • PM calls for international cooperation: In a tweet on November 18, Prime Minister Narendra Modi said that ‘democratic nations’ need to work together to ensure cryptocurrency and Bitcoin doesn’t end up in the wrong hands. The emphasis on democratic nations could also suggest a detraction from China’s approach which involved a blanket ban on crypto trading.

  • Govt finds ban unfeasible: Due to the large number of Indians invested in cryptocurrencies, the government finds a ban unfeasible, a government source told ET in a report on November 8. “A middle path that balances the concerns of all stakeholders is more likely,” the source was quoted as saying.
  • A calibrated approach: In an interview with CNBC TV-18 in March this year, after the same description of the crypto bill tabled in February caused a similar panic, the Finance Minister Nirmala Sitharaman said that the government will take a ‘calibrated position’:

    “Obviously, the RBI will take a call on what type of official crypto-currency will be planned and regulated. But also we want to make sure there is a window available for all kinds of experiments which will have to take place in the crypto world. Therefore, it is not like we are going to look inwards. There will be a very calibrated position taken”—Finance Minister Nirmala Sitharaman (emphasis ours)


We are discussing crypto regulation trends with our subscribers this week. Subscribe to MediaNama to attend this session.


Key stakeholders remain optimistic, ask investors not to panic

  • Nischal Shetty, WazirX: The WazirX founder and CEO took to Twitter with a plea, asking investors to have faith in lawmakers. ‘Ultimately, innovation will win,” he tweeted in an optimistic note.

  • Ashish Singhal, CoinSwitch Kuber: Coinswitch Kuber CEO Ashish Singhal also asked investors to remain calm, adding that “recent conversations with the government point towards a progressive approach.”

Crypto regulations in India: A timeline

Here’s a timeline of everything that’s happened till now around crypto regulation in India:

  • April 2018: The Reserve Bank of India banned regulated entities including banks from providing services to crypto exchanges. It said that cryptocurrencies raise concerns of “consumer protection, market integrity, and money laundering, among others”.
  • July 2019: A report by the Finance Ministry (drafted in 2017) advocated for a ban on the use of cryptocurrency in India. The report was drafted by an inter-ministerial committee chaired by the secretary of the Department of Economic Affairs Subhash Chandra Garg.
  • March 2020: The RBI ban was then overturned by the Supreme Court of India which said that the move was “disproportionate”. It led to a surge in sign-ups across various crypto exchanges as they were able to access banking services.
  • February 2021: The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 was listed in the official agenda of the Lok Sabha for the budget session, seeking to ban all private cryptocurrencies and allow a framework for an RBI-backed digital currency. The bill, however, was not introduced in the budget session.
  • July 2021: The RBI governor announced that the central bank is working towards a “phased implementation strategy” for the introduction of central bank-backed digital currency (CBDC), giving regulators necessary powers of oversight and monitoring which cryptocurrencies lack.
  • November 2021: The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 has been listed in the official agenda for the winter session, with the same purpose of seeking to ban all private cryptocurrencies and allow a framework for an RBI-backed digital currency.

Also read:

Have something to add? Subscribe to MediaNama here and post your comment. 

Written By

Reporter at MediaNama. Email: nishant@medianama.com

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

India and US come to terms on how to deal with the equalisation levy in light of the impending Global Tax Deal.

News

Find out how people’s health data is understood to have value and who can benefit from that value.

News

The US and other countries' retreat from a laissez-faire approach to regulating markets presents India with a rare opportunity.

News

When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.

News

The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ