A draft bill is on the works that is reportedly all set to ban cryptocurrency in India. If this bill is passed, there will no longer be a possibility for Indian companies to pull a Tesla and mine cryptocurrency by the heaps.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 which is in the draft stage reportedly proposes a complete ban on all private cryptocurrencies – a form of digital currency where records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transactions. Since these currencies do not have a centralized regulatory authority and are untraceable, governments across the world are skeptical of private cryptocurrencies like bitcoin, ethereum, titcoin, etc.
The bill will, however, lay the groundwork for an official digital currency to be managed by the Reserve Bank of India which can be regulated.
While this proposed bill will produce a blanket ban on all cryptocurrency, the RBI is expected to set guidelines for the use of other forms of digital currency. Nearly 7 million Indians hold cryptocurrencies worth over $1 billion and there has been an over 700 per cent increase in the last year, according to official estimates.
The decision was taken after an inter-ministerial panel, including representatives from the Reserve Bank of India (RBI), felt that private cryptocurrencies pose a risk to the financial stability of the country.
It is to be noted that this bill comes after an announcement by Tesla’s owner Elon Musk that he will be making a $1.5 billion investment in Bitcoin with plans to accept the cryptocurrency from customers purchasing its electric vehicles. This drove the digital currency to an all-time high.
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