The center has proposed proposing cryptocurrency bill to the winter session of Parliament, which begins November 29, to facilitate the creation of an official digital currency by the Reserve Bank of India (RBI). The bill aims to ban all but a few cryptocurrencies and introduce a system to regulate crypto transactions in India. However, following the government’s proposal, the values of major digital currencies fell significantly, with Bitcoin and Tether losing the most.
WHAT IS CRYPTO CURRENCY?
Investopedia defines cryptocurrency as a digital or virtual currency that is secured by cryptography, which makes counterfeiting or double spending almost impossible. Most cryptocurrencies are decentralized networks based on blockchain technology – a distributed ledger enforced by a disparate network of computers.
CRYPTO CURRENCY IN INDIA: 10 POINTS
1) The Government of India tried to propose the Law on Cryptocurrency and Official Digital Currency Regulation 2021 at the winter session of Parliament in order to regulate the cryptocurrency framework in India.
2) The RBI will likely introduce an official form of the cryptocurrency. With a few exceptions, all private cryptocurrencies will be banned in India when the law is passed in its current form.
3) When the news of the ban broke, the values of major cryptocurrencies fell. Bitcoin fell 18.53%, Tether 18.29% and Ethereum 15.58% on Tuesday. According to CoinDesk, most cryptocurrencies also remained in the red on Wednesday.
4) The government’s decision to propose the bill came after MPs concluded at a panel meeting on November 15 that Cryptocurrencies cannot be stopped and therefore needs to be regulated. While marking full-page crypto advertisements in national daily newspapers, MPs said the safety of investors’ money was the top concern for all members.
5) The RBI has been expressing serious concerns about cryptocurrencies since 2017. An RBI circular dated April 6, 2018 banned banks and companies regulated by them from providing services in relation to virtual currencies. However, on March 4, 2021, the Supreme Court overturned the circular.
6) At a recent event, RBI Governor Shaktikanta Das said it was still Lack of serious and informed conversations about cryptocurrencies in public space.
7) The SC Garg Committee had come to the conclusion that cryptocurrencies cannot serve the purpose of a fiat currency because private cryptocurrencies are incompatible with the essential functions of money / currency.
8th) Indian crypto exchanges and industry associations recently published a joint ad claiming that crypto investments by Indians have exceeded Rs 6 lakh crore and the number of investors has grown exponentially to over 10 crore.
9) In his speech to the Sydney Dialogue on November 18, Prime Minister Narendra Modi said that all countries must ensure that cryptocurrencies do not “fall into the wrong hands”.
10) Currently, El Salvador is the only country that has given cryptocurrency legal tender status.
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SEE: Cryptocurrency regulations around the world
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