By Alicia Maher
The Indian government headed by Prime Minister Narenda Modi seems to be caught in a dilemma concerning the crypto bill – Cryptocurrency and Regulation of Digital currency bill, 2021 scheduled to be implemented during the ongoing winter session of the Indian parliament.
According to reports, the Prime Minister has consulted with top government officials and representatives of the crypto industry from December 9 to 10 regarding the keenly awaited bill. These reports indicate that there is a sharp contrast of opinions between regulators of the financial sector and stakeholders in the crypto industry.
As the winter parliamentary session draws to a close, the government seems to be torn apart on its likely stance. India’s finance ministry has sent the bill to the cabinet for its approval. However, the cabinet hasn’t found it easy to approve the drafted bill because currently, there are 25 other bills scheduled to be implemented during the current winter session of the parliament.
Stiff conditions and regulations have been posed by regulators such as the Reserve Bank of India(RBI) and the Securities and Exchange Board of India(SEBI) and they are of the opinion that if crypto should be allowed in the country, it must be subject to regulations. On the other hand, crypto industry representatives also want such regulations to be eased in order to ease the business environment for crypto.
Impact of The Prime Minister’s Decision
After consultations with both the financial regulators and crypto representatives, the Prime Minister looks set to make a decision.
The disparity between both organizations leaves the prime minister with two options: ban cryptocurrencies and all transactions completely or bring them under tax income laws and regulate all of their transactions. Any of the two options have their pros and cons and the government doesn’t seem certain on which route to take.
Although, over the past three weeks, Prime Minister Modi has spoken twice about cryptocurrencies. First, speaking at a dialogue in Sydney, he reiterated that an emerging and powerful technology like Bitcoin or cryptocurrency, in general, shouldn’t fall into the wrong hands. He says “It is important that all democratic nations work together on crypto-currency and ensure it does not end up in the wrong hands, which can spoil our youth”.
More recently, he stated that emerging technologies are meant to improve democracy rather than undermine it. A day after his second speech on crypto (December 11), his Twitter account was hacked by some anonymous bitcoin miners who made some outrageous claims through the compromised account that the Indian government has bought well over 500 BTC and therefore made bitcoin a legal tender.
This, of course, is very laughable but it stirred a wave of laughter all around the entire crypto community and the incident gave India’s primary opposition party an opportunity to target the government.
Significance to Indian Investors
Over the past year, there has been a sudden increase in cryptocurrency trading platforms. According to data collected over the past year, it suggests that cryptocurrency holdings of nearly 20 million Bitcoin investors amount to almost 400 billion in India indicating that the country is emerging as the new frontier in the crypto market.
However, Indian investors should endeavor not to gamble in such speculative assets pertaining to the proposed crypto bill where they can only lose money in the long run.