The government is ready to present the Bill of Cryptocurrencies and Regulation of the Official Digital Currency, 2021 in the Winter Session of Parliament for its consideration and approval. The bill seeks to ban all private cryptocurrencies in India.
The bill will also seek to create a framework for the official digital currency to be issued by the Reserve Bank of India.
Reports had previously stated that the government is unlikely to ban cryptocurrencies, but may take a cautious approach towards such investments and allow them as assets rather than currencies.
Sources have previously told CNBC-TV18 that the measures taken by the government will be progressive and forward-looking, but misleading cryptocurrency advertisements need to be stopped. Due to concerns about potential risks to Indian investors, the Center is also of the opinion that unregulated cryptocurrency markets should not be misused for money laundering and terrorist financing, they said.
Market experts have been demanding regulation of cryptocurrencies for quite some time as they fear that an unregulated environment with multiple platforms indulging in overly promising and non-transparent advertisements could mislead investors and lead to massive losses.
RBI has also repeatedly expressed concern about cryptocurrencies. "Cryptocurrencies are a very serious concern and we have concerns from a macroeconomic and financial stability point of view. RBI has given detailed suggestions to the government and the matter is under active government consideration," said RBI Governor Shaktikanta Das , November 11.
What is private cryptocurrency?
In an interview with Business Insider, Rahul Pagdipati, CEO of ZebPay highlighted an interesting aspect.
"Its success (of the bill) will depend on the details, in particular the definition of what the bill calls 'private cryptocurrencies.' This is not a common term. Bitcoin is not the private property of anyone. It is a commodity. public, like the Internet, "he said.
Cryptocurrencies are based on blockchain technology. A blockchain stores information electronically in digital form.
On a public blockchain, anyone is free to join and participate in the main activities of the blockchain network, according to Investopedia. On the other hand, a private blockchain allows only selected input from verified participants.
(Edited by : Kanishka Sarkar, Abhishek Jha)
First published: IT IS
