The introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is likely to be done in the current Parliament session. Government has assured to take a calibrated approach towards cryptocurrency trade in India.
Crypto Industry
Indian players like WazirX, CoinDCX have been requesting Government to reconsider the ban imposed on cryptocurrencies.
o Cryptos are seen as an asset by investors in India – hence, its ideal to tax them rather than imposing a total ban.
· Further, cryptos exist exclusively on the internet, hence a total ban by Government may not work as users cannot be stopped from using them.
o Digital wallets and online transfer are easier – hence implementation of a complete ban may not work practically.
· Criminalizing crypto exchanges will make all crypto exchanges targeting Indian users illegal.
o It might drive crypto holders in India to underground markets, and they’ll likely take their wealth offshore.
o It might make it difficult and costly to develop new blockchain-based products.
Possibility of CBDC
· Reserve Bank of India is considering a CBDC (Central Bank Digital Currency), which will be a digital form of the rupee.
· CBDCs have a central authority controlling them and use blockchain infrastructure to bring transparency and enhance security in the country’s financial systems.
