The lawmakers of India propose a law that will put a ban on the cryptocurrency usage in the country. The new law will create a hurdle in crypto growth in India.
There seems a deep conflict between the government and people who are attached with the crypto space. The chaos in the political scenario has constructed many difficulties against the digital assets industry.
The bill entitled “Cryptocurrency and Regulation of Official Digital Currency Bill” is drafted to ban any kind of private-oriented cryptocurrency.
Crypto business got a boom in India after the Supreme Court ruled out that the digital assets were legal. But the lawmakers are not ready to accept cryptocurrency in traditional finance structure. The Reserve Bank of India was ordered by the court to monitor and scrutinize any illegal activity linked with cryptocurrency.
If the proposed regulation becomes a reality, the crypto space in the region would become illegitimate and crypto-related businesses would go towards loss.
As revealed by the officials, India has plans to introduce central bank digital currency. So, the government will first stop the flourishent of privately-owned cryptocurrencies.
According to market specialists, the central bank is working on the development of digital Rupee for the last two years. But no official news has been unveiled regarding progress in the creation of central bank digital currency.
Shaktikanta Das, the governor of Reserve Bank of India (RBI), denied revealing information about CBDC development in 2019. At the time, the study on the digital Rupee was in the early stages.
There are strong chances of bill passing as the government is largely controlled by one part, the Bhartiya Janata Party.
Crypto Enthusiasts are not Happy
The latest development has put crypto community in chaos. The Bitcoin enthusiasts have not welcomed the new proposed legal document. Instead, they criticized the government for such actions. Sumit Gupta, the founder of the cryptocurrency exchange COINDCX, suggested that the government should define the private cyptocurrencies and how they are different from public cryptocurrencies. He further explained that Bitcoin and Ethereum, the world’s two largest cryptocurrencies, are recognized as public because a transaction can be verified by anyone.
Famed lawyer Jaideep Reddy said that the ban would snatch away the right from people to conduct crypto-based businesses. Otherwise, the holders of the digital assets should be compensated by the government.