India and cryptocurrency have had a weird, bittersweet relationship, as the country’s regulators can’t seem to decide their stance on the new technology. However, it looks like India is preparing to take its most decisive step in the world of cryptocurrency, as a bill to ban the use of these digital currencies was listed during the budget session of 17th Lok Sabha.
The bill says that all ‘private’ cryptocurrencies such as BitCoin, Ether, Ripple, and even the newly emerging meme currency Dogecoin, should be banned from the country.
“Private digital currencies have gained popularity in recent years,” a booklet talking about payment systems in India from RBI said. “In India, the regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks.”
Instead, the bill proposes a new, public cryptocurrency, which will be rolled out by RBI. This, essentially a digital version of the rupee, will work as an official digital currency, and the bill proposes the creation of a legislative framework for its rollout.
“RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and, in case there is, how to operationalize it,” the booklet from RBI noted.
This comes as a massive surprise, as trading in cryptocurrencies has seen an exponential rise in the last year. According to Sumit Gupta, CEO, CoinDCX, there are 7 million crypto holders in India, with over $1 Billion+ crypto assets owned by Indians. Thus, a ban will wreak havoc on the nascent yet promising cryptocurrency market in India.
Earlier, RBI had placed a ban on cryptocurrencies in the country, which was lifted last year. Just a few weeks after that, CoinDCX raised millions in capital, as investors flocked to invest in this new, digital era of investments. To ban the technology once again, just one year after it had been operating in the country, seems arbitrary.