Cryptocurrency & It's Future in India

Cryptocurrency & It's Future in India 

In recent Lok-Sabha Budget session Minister of State for Finance, Anurag Thakur has said on the floor of Parliament that a cryptocurrency bill is prepared and very soon will be sent to Union Cabinet soon.

Finance Minister Nirmala Sitharaman, while responding to an issue within the Rajya Sabha on the government’s decision to issue guidelines on cryptocurrency trading, said a high-level committee, which was formed to study issues related to virtual currencies, recommended that all private cryptocurrencies, except any virtual currencies issued by the State, will be prohibited in the country.

The Federal Reserve Bank of India (RBI) had banned banks from processing transactions concerning cryptocurrency in 2018. Last year, in March, the Supreme Court lifted the ban, stating that it had been violative of the liberty of business and profession under Article 19(1)(g) of the Constitution. Since then, cryptocurrency has been operating in a legal vacuum in India.

What is a cryptocurrency bill?

The Indian government doesn't consider cryptocurrencies tender or coins. So, the govt wants to eliminate the utilization of cryptocurrencies and doesn’t want such currencies to become a neighbourhood of the payment system. It has thus listed a bill in Parliament, seeking to bar all private cryptocurrencies in India, and also lay the groundwork for a politician digital currency. The detailed provisions of the bill haven't yet been released to the general public.

A few days ago, even RBI had stated that it had been performing on a digital version of the rupee and results were expected soon. A summary of the bill stated that it sought to “create a facilitative framework for the creation of the digital currency to be issued by the Federal Reserve Bank of India”. Such official currencies are being contemplated by several central banks globally, like Canada, USA, Singapore and China.

What does it mean for Bitcoin?

Since the detailed provisions of the bill aren't yet known, there isn’t much clarity on whether those holding Bitcoins or other cryptocurrencies should sell them or not. However, the bill does mention that certain exceptions could also be made to preserve the underlying technology of cryptocurrencies, which is blockchain.

Blockchain is employed to take care of records in such how that they can't be tampered with easily. Apart from cryptocurrencies, technology is employed to preserve records like educational certificates, land documents etc.

Globally, governments are positive about blockchain as a technology but have negative views about cryptocurrencies. In the bill listed within the Parliament, the Indian government, too, seems to possess taken an identical stand.