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Amid lightning pace developments in the cryptocurrency space in the country, the industry has urged investors to remain calm and not arrive at a rushed conclusion.
The union government has listed cryptocurrency Bill for passage in the Winter Session of Parliament, with the Bill's objective being prohibition of all private cryptocurrencies, barring some exceptions.
'The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021', to be introduced in the winter session of Parliament beginning November 29, seeks to "create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses".
Digital currencies on Indian exchanges slumped into a discount of up to 25% compared to their global peers amid panic selling as the government listed a bill to ban all private cryptocurrencies in the country. Crypto prices in India usually trade at a premium against global markets.
"It is hard to comprehend what the government means by private cryptocurrencies. Bitcoin, Ether etc. are public crypto built on public blockchains and have their own specific use cases," said Nischal Shetty, founder of WazirX.
"They are needed to run smart contract and write to the distributed ledger that they’re built on top of. People cannot use INR or USDT to pay for fees on the Bitcoin or Ethereum Blockchain," Nischal Shetty further added.
BuyUcoin CEO Shivam Thakral said it expects the Bill to accommodate the aspirations of Indian crypto owners, Indian crypto entrepreneurs, and investors who have put their faith in India's crypto growth story.
"The crypto Bill should be flexible enough for young blockchain projects to flourish and we strongly believe that there is a strong case for a standard process for new cryptocurrencies before they get listed on any exchange in India for trading.
"I think popular crypto-assets like Bitcoin and Ethereum will be pre-approved by the regulators for getting listed on the exchange. We also request the government to give immediate clarity on the taxation and filing of crypto assets," Thakral said.
Avinash Shekhar, Co-CEO of ZebPay, said the industry is awaiting further details on the Bill that is going to be presented in the winter session of the Parliament. There have been many positive steps taken by the government to learn and understand crypto and its impact on all stakeholders- investors, exchanges, policymakers.
"So, we’re looking forward to a crypto bill that takes into consideration all the inputs from those discussions," he added
Currently, there is no regulation or any ban on the use of cryptocurrencies in the country. Against this backdrop, Prime Minister Narendra Modi earlier this month held a meeting on the cryptocurrencies with senior officials, and indications are that strong regulatory steps could be taken to deal with the issue.
There has been a rising number of advertisements, featuring even film stars, promising easy and high returns on investments in cryptocurrencies in recent times, amid concerns over such currencies being allegedly used for luring investors with misleading claims.
Last week, the Standing Committee on Finance, chaired by BJP member Jayant Sinha, met the representatives of crypto exchanges and BACC, among others, and arrived at a conclusion that cryptocurrencies should not be banned, but it should be regulated.
The RBI has repeatedly reiterated its strong views against cryptocurrencies saying they pose serious threats to the macroeconomic and financial stability of the country and also doubted the number of investors trading on them as well as their claimed market value.
RBI Governor Shaktikanta Das has also reiterated his views against allowing cryptocurrencies saying they are a serious threat to any financial system since they are unregulated by central banks.
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