The central government's agenda for the upcoming winter session added plans to ban private cryptocurrencies. This move came after RBI Governor Shaktikanta Das warned that cryptocurrencies could pose a danger to financial stability.
The government on Tuesday stated that it would prohibit all private cryptocurrencies except a few exceptions so as promote the underlying technologies and the uses related to them. The Center has long before stated its dislike towards cryptocurrencies, as they stated that these unregulated assets pose a risk.
PM Modi indicated in a meeting earlier in November that an unregulated crypto market can be misused- for money laundering and terror financing. Concerns have also been raised regarding deceptive claims used to entice investors, particularly young people, by promising huge profits.
The proposed measure will establish a framework for the RBI to launch an official digital currency.
More than ten crore Indians, including young and old citizens, possess cryptocurrencies, far more than the United States. Following the public disclosure of the prohibition, the value of various cryptocurrencies, including bitcoin, ether, and others, collapsed.
According to Finance Minister Nirmala Sitharaman, the government would not declare an outright ban. It will instead create ways for experiments in the digital world and cryptocurrency to take place. Regulatory procedures will be put in place to prevent cryptocurrency misuse. This announcement would undoubtedly come as a welcome relief to the investors.
The bill has not yet been finalized, according to administration reports. The bill is unlikely to be introduced during the first week of the winter session, which starts on Monday. The government's classification of bitcoin usage will be interesting to watch. Although El Salvador has permitted the use of cryptocurrencies for official purposes, China has outright prohibited them.
The administration had planned to submit legislation on the subject during the budget session, but the session was cut short. Therefore, it never happened.
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