Cryptocurrency investors in India hit the panic button last night as the winter schedule of parliament, starting from November 29, was published. It indicated that a new cryptocurrency bill will be tabled for discussion, which might but a ban on cryptocurrency trading in the country.
The description of the bill said that it “seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.” It also indicated that the Reserve Bank of India, the country’s central bank, might issue an official digital coin in the future.
While this sounds scary for investors and cryptocurrency exchanges, many folks pointed out that the summary resembles the previous description of the bill, and it might not be reflective of the actual content.
What is the problem?
In the last week, several authorities have called for regulation on cryptocurrencies. Jayant Sinha, the chairman of the parliamentary committee on finance on cryptocurrencies told CNB TV18 that while exchanges have claimed to have self-regulatory practices, they have to prevent money laundering through digital currency.
Speaking at Sydney Dialogue, an event about emerging technologies, PM Narendra Modi cautioned about the misuse of cryptocurrencies.
Take crypto-currency or bitcoin for example.
It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth: PM @narendramodi
— PMO India (@PMOIndia) November 18, 2021
All hope is not lost though. A report from News18 suggested that government doesn’t plan to put a blanket ban on cryptocurrencies — but just wants to put some guardrails in place.
What does this mean for cryptocurrency investors?
Apart from local exchanges, foreign companies like Coinbase and Kraken, will need to wrap up their operations from the country if the bill is passed. India’s central bank has been against cryptocurrencies for the last few years, issuing circulars to banks to stop dealing with crypto businesses.
After the parliament’s winter schedule was announced, several investors started selling their coins. Cryptocurrency exchanges have urged people to stop panicking as there’s no final law in place.
Ashish Singhal, Founder & CEO, CoinSwitch Kuber, a company backed by a16z, said investors shouldn’t make rushed decisions:
The crypto industry is hopeful that the government will involve the industry stakeholders while drafting the bill. At CoinSwitch Kuber, we shall follow the directions provided by the government. As of now, I urge all crypto asset investors in the country to remain calm, do their own research before arriving at a rushed conclusion. Investors should wait for a government statement on this matter and not rely on secondary sources of information.”
Nischal Shetty of WazirX tweeted that law markers understand the market with more than 15 million cryptocurrency owners in the country, so there’s no need to panic.
India’s crypto industry has been thrown into a frenzy many times as the space is unregulated and there’s been a fear of a sudden shutdown. If there’s no blanket bank on cryptocurrency, this proposed bill will hopefully provide much-needed stability and a framework for exchanges and investors.