Bill to ban cryptography in the government’s Parl program | Latest India News

[ad_1]

A bill that “seeks to ban all private cryptocurrencies in India” is among 26 pieces of legislation expected to be presented to parliament in the session starting next week, according to a statement from Lok Sabha released on Tuesday. the clearest sign to date that the Union government is preparing to ban instruments such as Bitcoin for transactions in the country.

India currently has no regulations for cryptocurrencies – a collection of decentralized digital currencies such as Bitcoin and Ethereum that are not regulated by any sovereign banking regulator. No official data is available, but industry estimates suggest that there are 15-20 million crypto investors in India, with total crypto holdings of around 40,000 crore ($ 5.39 billion ), Reuters reported, although some exchanges put the value at $ 10 billion.

The Cryptocurrency and Official Digital Currency Regulation Bill, 2021 aims to “create a framework to facilitate the creation of the official digital currency to be issued by the Reserve Bank of India.” The bill also seeks to ban all private cryptocurrencies in India, however, it allows certain exceptions to promote the underlying technology of the cryptocurrency and its uses, ”the bulletin published by Lok Sabha said.

Prime Minister Narendra Modi chaired a meeting on November 13 to discuss the future of cryptocurrencies as unregulated crypto markets could become avenues for money laundering and terrorist financing, said someone familiar with the matter, asking not to be named. The RBI had in 2018 banned the banking system from cryptocurrency transactions, which was struck down by the Supreme Court in 2020.

It is currently unclear what kind of options the government may or may not offer to people who hold cryptocurrencies, although people familiar with the issue have said in the past that people may have a window to liquidate. their holdings and pay taxes on earnings. .

“After the meeting, it was agreed that various unscrupulous elements are trying to deceive Indian youth by positioning cryptocurrency as the shortest, fastest and safest way to get rich. Likewise, many people indulge in non-transparent advertisements, risking gullible people, whom the government wants arrested, ”said the person quoted above.

The meeting was held after consultations with experts from government agencies and the Reserve Bank of India (RBI), after which the government concluded that these should be banned. Independent stakeholders, including the Confederation of Indian Industry (CII), have urged the government to put in place regulation instead of an outright ban.

A senior leader of an opposition party, who asked not to be named, said he would ask that “the bill be referred to a parliamentary panel”.

The government, however, intends to move forward with a plan to allow the Reserve Bank of India (RBI) to float its own digital currency. Technically known as central bank digital currency (CBDC), these differ from cryptocurrencies in that they are regulated by a centralized authority – the central bank. In the case of India, people familiar with the issue have previously said that this national digital currency may initially be pegged at a 1: 1 ratio to the rupee.

The bill could also allow the use of technologies known as blockchain and distributed ledgers, which underpin the cryptocurrency mechanism but have also been used to create secure records and identity management.

Countries are currently divided on how to approach cryptocurrency regulation. According to an October 2021 note from Fitch Ratings, the exposure of US companies and financial institutions to cryptocurrencies is expected to increase – several companies, such as Tesla, have accepted Bitcoin for payments and plan to resume if concerns about their environmental impacts are addressed.

On September 24, China banned cryptocurrencies and rolled out its own digital currency, known as e-CNY.

A Fitch report on CBDCs from May 2021 said these digital currencies have the potential to drive cashless payments and a wider digitization of economies. “For central banks in some emerging markets, a key driver of CBDC research is the opportunity to integrate underbanked communities into the financial system and improve cost, speed and resilience. payments. “

“The world’s largest economies and their central banks have announced that they are working on CBDCs: the US Federal Reserve, Bank of Canada and European Central Bank are lagging behind the People’s Bank of China, which is already testing its CBDC with over 50,000 citizens. The Bahamas issued their central bank digital currency – the ‘sand dollar’ – in October, ”he added.

The difference between a decentralized and a centralized currency is at the heart of the arguments for and against the two types of digital currencies. While cryptocurrencies such as Bitcoin offer the anonymity of the nature of commercial paper and derive their value from its demand and supply, they do not carry any sovereign guarantees that make collapses of value intangible. On the other hand, CBDCs do not involve such risks but they do not offer the anonymity of cash.

In addition, experts have expressed concerns about the impact on banking institutions that currently act as intermediaries in the financial system.

“This is a great moment for India. From a banking ban in 2018 to the registration of the bill on cryptocurrency and the regulation of official digital currency, 2021 during the winter session of Parliament. Our nation has come a long way in these 3 years! It says a lot about India’s determination to dominate the Web 3.0 era, ”said Nischal Shetty, founder of Wazirx, a cryptocurrency exchange.

“Although the description of the bill appears to be the same as in January 2021, several notable events have occurred since January. First, the Standing Committee of Parliament invited a public consultation, and then our Prime Minister himself showed up to call for crypto regulation in India. That being said, let’s respectfully wait to hear more about the bill that will be tabled in Parliament, ”added Shetty.

[ad_2]