The government will move a bill against private cryptocurrency

The Indian government is planning to introduce a bill which would prohibit any sort of use for private cryptocurrencies across the country. The use of such currencies should only be limited to transactions by authorized entities and for payment within the country, as per the introduction to the bill, which has been published on online public forums and other effectual sites.

According to a report from Sci-Tech Today, India may be banning cryptocurrencies as early as this fall. This comes after the Indian government has announced their intentions to introduce a new financial regulation bill later on this year.

ban cryptocurrency

In order for digital currency to become a reality we need regulation otherwise we’ll be letting it run rampant and potentially enable the propagation of global economic instability. That’s why it’s extremely important to create strict regulation of official digital currency at this time and make sure no private cryptocurrencies like Ethereum and Bitcoin ever get any more attention than they already have.

Earlier this month, Indian prime minister Narendra Modi said all democratic nations must work together to ensure cryptocurrency “does not end up in the wrong hands,” which can spoil our youth.” – his first public comments on the subject.

PM Modi chaired a closed door meeting to discuss the future of cryptocurrencies. PM Modi addressed senior officials from his cabinet as well as the likes of Shaktikanta Das, Finance Secretary, Ravi Shankar Prasad, Minister for Law & Justice and Amit Shah, President of BJP. The issue has been coming up over the past several weeks. Reports have stated that there could be potential threats associated with unregulated crypto markets which may inadvertently lead to money laundering and terror financing. Sources say that the recent integration of cryptocurrencies by RBI is part of this meeting’s agenda.

The new legislation is likely to discourage the marketing of cryptocurrencies to retail investors, so as to diminish their appeal, said one source who is also a member of an alternate parliamentary committee.

Government sources told Reuters that the governments plan is to ban the use of private cryptocurrencies and if convinced on a new Central Bank Digital Currency (CBDC) would launch by December. Government official Asoke Mohanty told Reuters the government will not allow cryptocurrencies to become legal tender and remains opposed to an indigenous digital currency although they do understand some institutions may need to use it. Bitcoin is hovering around $60,000 (euro 50,000)) and has more than doubled this year, drawing in large numbers of investors who see it as a quick way to get rich. Industry estimates suggest that there are 15-20 million crypto investors in India with total holdings of almost 400 billion rupees (€4.77 billion).

The central government has been courting the idea of a digital currency for a while. It’s been prompted primarily by many citizens’ preference for digital currency in lieu of physical currency primarily due to how electronic currency operates on something called blockchain technology. Such currency is not regulated by any one party and can get transferred from one user to another without going through a middle man such as a bank, which tend to pass on the charges they pay on to their clients. Therefore, some members of Parliament have advanced that it may be time that we shifted towards a system where our existing fiat currency gets replaced with a similar type of currency that functions primarily on this type of blockchain technology platform.

India’s private sector banks are on more solid ground than the government-owned public sector banks. Although they are part of the same system, they are subject to less regulation. This also means that more room is available for greater expansion and more products. Also, the battle between domestic private sector banks and national or regional private sector banks has traditionally been intense in India

Earlier, the RBI Administrator had stated that unregulated growth of cryptocurrencies poses a risk to the macroeconomic and financial stability of the country.

The central bank has stated that it is exploring the possibility of introducing a government-backed digital currency.

The central bank has plans to introduce its own digital currency. On 4 March 2020, the Supreme Court set aside an April 6th RBI decision that prohibited commercial banks from providing services relating to crypto, allowing for crypto business development in India. The Banking Laws (Amendment) Bill, 2021 will likely be tabled sometime later this year regarding privatization of two Public Sector Banks left untouched by previous banking reforms.