3 min read.Updated: 24 Nov 2021, 06:09 PM ISTLivemint
The union government is all set to introduce a Cryptocurrency Bill for consideration and passing in the Winter Session of Parliament
Listen to this article
The union government is all set to introduce a Cryptocurrency Bill for consideration and passing in the Winter Session of Parliament, that seeks to prohibit all private cryptocurrencies, barring a few exceptions.
Cryptocurrencies plunged on Indian exchanges following the news into a discount of up to 25% compared to their global peers amid heavy selling.
'The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021', aims to create a facilitative framework for creation of the official digital currency to be issued by the RBI. It 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.
Amid panic among investors, the industry has urged investors to remain calm and not arrive at a rushed conclusion. It has also sought nuanced approach from the government, keeping in mind the interest of millions of stakeholders.
Cryptocurrency craze has grown at a furious rate in India after the Supreme Court lifted the ban on digital currencies. The high rate of returns is luring many investors towards investment in crypto coins, despite it being highly volatile and risky. The euphoria is not only limited to metros but is garnering lot of interest from young population in tier-II and tier-III cities.
There are reports that the government is considering a proposal to treat cryptocurrencies as a financial asset while safeguarding small investors, Bloomberg reported citing people familiar with the matter.
The discussions come as authorities race to finalize a bill Prime Minister Narendra Modi’s government wants to present to parliament in the session starting Nov. 29. The legislation may stipulate a minimum amount for investments in digital currencies, while banning their use as legal tender, the people said, asking not to be identified as no final decision has been taken.
In light of fast paced developments in the cryptocurrency space, let us look at what is at stake for the industry and millions of investors in India who are waiting with bated breath to see what lies ahead.
- According to a note from Hemang Jani, Head – Equity Strategy, Broking & Distribution at Motilal Oswal Financial Services, the total no of crypto investors in India stands a few crores with total investment of ₹6 lakh crore as per the advt released by a group of 13-members including Internet and Mobile Association of India, Blockchain and Crypto Assets Council’s (BACC), crypto exchanges and others that are part of crypto investment ecosystem in India.
- This compares with a total investment in equity of ₹274 lakh crore.
- As per Triple A, a leading cryptocurrency payments company, global crypto ownership rate currently stands at 3.9%, with over 30 crore crypto users worldwide and over 18,000 businesses already accepting cryptocurrency payments.
- Even in India Cryptocurrencies has gained prominence ever since the RBI ban was lifted in March 2020. India now has 15 home-growncrypto currency exchange platforms, consisting of more than 10 crore investors.
- According to broker discovery and comparison platform BrokerChooser, the total number of crypto owners in India now stands at 10.07 crore, which puts it ahead of every other country in the world. US stands at second position with number of crypto owners at 2.7 crore, followed by Russia (1.7 crore) and Nigeria (1.3 crore).
- In comparison, the number of stock investors registered with the BSE/NSE in India has risen to 7.4 crore at present while for MF it stands at 11.4 crore.
- In terms of share of crypto investors as a percentage of population, India stands at 5th position at 7.3% vs Ukraine (12.7%), Russia (11.9%), Kenya (8.5%) and US (8.3%).
- When it comes to exchanges, CoinSwitchKuber and WazirX are two popular crypto exchanges in India with 11 million and 8.3 million users respectively, surpassing even India’s largest stockbroker Zerodha which has 7 million clients.
- According to crypto research and intelligence business CREBACO, Indian crypto investments have increased to over $10 billion from $0.9 billion in April’20, as crypto markets touched all-time highs.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!