Kutch toh badlega: here’s how crypto money is likely to change after a new crypto bill

There has been an upheaval among cryptocurrency investors in India since last night. The frenzy was sparked by the Indian government sharing a list of 26 bills, which are due to be introduced in the winter session of parliament. Indeed, among bills from several other sectors, the list contains the Cryptocurrency and Official Digital Currency Regulation Bill, 2021.

One look at the bill and it looks like we’re back to square one after all these years. As before, the government has proposed to ban the use of private cryptocurrencies in the country. In place of all these private cryptocurrencies, the government plans to introduce its own official digital currency, which will be issued and regulated by the Reserve Bank of India.

This is a huge step forward, judging from what has been proposed in the bill, which must be introduced before the winter session of Parliament which begins later this month. Whether the bill passes or fails, or if it even gets presented to the panel during the session, is a whole different matter. What matters right now is the bill’s reflection on where the government might go when it comes to cryptocurrencies in India.

And in the present state of things, the opinion of the government does not conform to that of the masses. There are millions of crypto investors in the country who, along with stakeholders in the crypto industry, have rallied around the adoption of the use of cryptocurrency in the country. From what we see in the bill, the government does not intend to respond to these requests.

There is, however, a significant gray area left by the government’s new proposal. The concept of “private cryptocurrencies” still escapes many, and people wonder if their preferred cryptocurrency or token is a private or a public entity. Diving deep into such questions, here’s how we expect the future of cryptocurrencies in India to be.

The future of crypto in India

First of all, the bill, for the first time, does not propose a complete ban on cryptocurrencies. Instead, he plans to adopt the underlying technology (blockchain) for what could be the country’s very first official cryptocurrency. This means the government is ready to make technology an official part of the country’s financial system for the very first time.

That’s a big plus, because the real reasons Bitcoin has seen its meteoric rise, followed by other cryptocurrencies, over the years is not just a hype. The reason was that Bitcoin was seen as a viable evolutionary stage in the financial world – a decentralized stage and not requiring a regulator. Its operation is transparent to everyone and is the most secure among all financial means.

Thus, the new bill shows that the Indian government is interested in the prospect of having such a financial tool in the country’s economy. Needless to say, this is the first time the government has shown such interest in the sector.

As for the other part of the bill, which talks about a general ban on private cryptocurrencies, further clarification is expected from the government. This is simply because the distinction between private and public cryptocurrencies, or how the government sees it in the bill, is not yet clear. There is even a chance that the bill will be rebutted and no ban will be imposed on cryptocurrencies.

Another possibility, and likely, is that the bill will be amended to ban the use of these private cryptocurrencies in the country, but allow them to be held as an asset class by investors. Such a government position has also been brought up, after the recent crypto stakeholder meeting with a panel from Lok Sabha.

While there is a slight chance that the scenario dreaded by most crypto investors in India, the government is unwilling to relax cryptocurrency regulations and ban them outright, as before. In such a case, it is likely that the government will give investors time to recover their assets from the stock exchanges.

Either way, the use of cryptocurrency in India now appears to be one of the government’s main agendas. The fact that the government is even starting to take their regulations seriously is a big step towards their national recognition. What was once a hobby for enthusiasts will soon become a hot topic for household conversations across the country and the government’s position in this regard will have a huge role to play in that regard. Which way it leans, we’ll find out in time.

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