Is Cryptocurrency Set to be Banned in India and Traders to be Penalized Soon?

There are eminent reports that states,  The government of India has proposed a bill to impose a ban on the investments of cryptocurrency, tradings, and mining in the country. 

The law is already proposed by Nirmala Sitaram, Finance Minister of India. She, in the Rajya Sabha, stated, “The top-level IMC (Inter Minister Committee) has already been elected under the secretary chairmanship of the secretary of the Economic Affair. They will investigate all the cases pertaining to the currencies that are virtual and will propose a blueprint to prohibit all the private cryptocurrencies. However, there will be an exemption of the virtual cryptocurrency that is issued by the state.” 

Deccan Herald, the leading newspaper published the remark by Sitaram (at the conclave of India Today), “From our side, we are very clear that we are not shutting all options. We will allow certain windows for people to do experiments on the blockchain, bitcoins or cryptocurrency”.

What is the purpose of this law?

There are mainly two purposes of this law, namely:-

1. To develop a simplified structure for a valid digital currency circulated by the Reserve Bank of India as published in the English-language editorial, .The Hindu
2. To condemn all the independent cryptocurrencies in the country. 

In March 2020, the shooting star of cryptocurrencies “Bitcoin” outshined with a trading value between $5,000- $6,000. This value was hit high on Saturday (i.e March 13, 2021) with its number expanding by 1000%. It was adopted by leading enterprise and investors. According to The Indian Express, Tesla, an American electric vehicle manufacturing company purchased the Bitcoin worth $1.5 billion. There is news that confirms this investor has plans to get it as payment.

The bull race started during the pandemic time when the country was completely locked down. And investors started to favor the digital currency, especially the GEN-X and millennial investors. 

The young Indian investors also boarded this flight after seeing the rich reaps earned by global investors.  Even though the official numbers are quite less but the volume in the transactions were rising. 

According to the estimation, over 8 million Indian citizens are trading cryptocurrencies with the holding amounted to be nearly $1.4 billion.

The Stance of the Reserve Bank of India on Cryptocurrencies

RBI is one of the significant critiques of cryptocurrencies. They have expressed their negative viewpoint against it. They clarify that a high degree of unpredictability arises in the value of money. It can lead to possible financial disaster and instability. 

Will this Law Penalise Indian Traders?

The answer is “NO”, but yes, the analysts speculate that the new law will certainly damage the existing investors (individuals who have invested in cryptocurrencies that are not by the state). However, there are no confirmations to ban Etherum and Bitcoin. Reuters shares, the recent judgement by the government of India has surely raised hope among the investors as there will be flexibility given by the authorities on this thriving market. 

Pranay Aggarwal,  Co-founder and Chief Operating Officer at MobileCoderz, shares “Many businesses will surely get impacted, mainly the start-ups. But let’s see the positive side of this bill as it rests on the positive influence of Blockchain technology on finance. It is high time to re-evaluate the journey”.

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