Indian government set to ban cryptocurrencies

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The government would introduce a bill to ban all private cryptocurrencies in India while providing certain exceptions to promote the underlying technology of cryptocurrency. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021′ is among 26 new bills on the agenda of the government for the winter session of parliament beginning November 29. The bill seeks to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India.

Nikhil Kamath, the owner of online profit booking platform Zerodha, also expressed his concern regarding the bill. “Is the Indian govt banning cryptos? What happens to everything in circulation already,” he asked on Twitter.

Kamath’s concerns are not to be dismissed. As per a report by moneycontrol.com, the crypto industry estimates point out that there are 15 million to 20 million crypto investors in India. With this, the total amount of crypto holding in the country rises to Rs 40,000 crore or $5.39 billion. Prime Minister Narendra Modi chaired a meeting to discuss the future of cryptocurrencies earlier this month and also warned against cryptocurrency falling in the wrong hands. The Centre also said that it is planning new changes in the income tax laws in a bid to bring cryptocurrency gains under the tax radar and also to introduce them during the Union Budget next year.

The Reserve Bank of India has on several occasions highlighted that it feels cryptocurrencies like BitCoin, Ethereum and Dogecoin among many others pose a risk to financial stability and also questioned its claims of market value while asking investors to not get “lured” by the promises of returns on cryptocurrencies.

However, the Supreme Court nullified the RBI circular banning cryptocurrencies in 2020 and also set aside an RBI circular of April 6, 2018, prohibiting banks and entities regulated by it from providing services with connection to virtual currencies in March this year.

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