Industry executives believe that the government’s concern lies around the use of cryptocurrencies as an alternative to the Indian Rupee. However, many argued that Bitcoin, Ethereum and others are used more as assets than legal tender
NEW DELHI: Domestic cryptocurrency platforms are coming together to launch a new campaign meant to deter the Indian government from banning private cryptocurrencies in the country. The companies have launched a platform called Indiawantsbitcoin.org, which allows anyone to send an email to their respective Members of Parliament (MP), showing support for cryptocurrencies.
The platform contains a ready to send draft email, requiring users to simply select their state and district. The email expresses “delight" at the prospect of creating India’s own digital currency, but also claims that the country has 10-20 million crypto users and over 340 startups in the space. The platforms also said that trading volumes in India’s top crypto exchanges have grown by over 500% in 2020. According to data from market research firm Venture Intelligence, investments worth $24 million went into cryptocurrency firms in India in 2020.
The industry has been nervous since the central government announced plans to ban the use of private cryptocurrencies in India late last month. The same was announced via the agenda for the Budget session of the Parliament. The government is expected to introduce a bill aimed to create a framework for India’s own digital currency issued by the Reserve Bank of India (RBI). This bill will also “prohibit all private cryptocurrencies in India". The definition of “private cryptocurrency" hasn’t been clarified yet, but many expect this to amount to a ban on digital currencies like Bitcoin, Ethereum and more.
Industry executives believe that the government’s concern lies around the use of cryptocurrencies as an alternative to the Indian Rupee. However, many argued that currencies like Bitcoin, Ethereum and others are used more as assets than legal tender.
"As an industry, we’re in sync with the fact that INR is the only legal tender in India and about crypto being an asset/utility that people buy and sell," said Nishcal Shetty, founder of India’s largest crypto exchange, WazirX, in a statement last week.
The cryptocurrency industry in India has enjoyed a successful 2020, with more people investing in crypto as the pandemic led to big turmoil in the stock markets. The Supreme Court had also struck down an order by the RBI in March last year, which banned banks and other regulated entities from doing business with crypto firms.
This new bill brings back memories of the draft “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill" floated by the government in 2019. That bill proposed the banning of such currencies and a fine or imprisonment of up to 10 years, or both, for mining, holding, selling, trade, issuance, disposal or use of crypto in India.