The central government has finally revealed that it will bring a new bill on cryptocurrency (Cryptocurrency and Regulation of Official Cryptocurrency Bill 2021) in the ongoing budget session in Parliament. Finance Minister Nirmala Sitharaman has said that an Inter-Ministerial Committee (IMC) has suggested banning private cryptocurrency in India, like Bitcoin.
Additionally, the same committee has sought to introduce an official digital currency that will be properly regulated by the Reserve Bank of India.
FM Sitharaman said in the Rajya Sabha on 9 February, “A high-level inter-ministerial committee (chaired by the Secretary (Economic Affairs)) to study the issues related to virtual currencies and propose specific actions to be taken in the matter” IMC) recommended in its report that all private cryptocurrencies will be banned in India except for any virtual currencies issued by the state.
Recently, Minister of State for Finance Anurag Thakur had also told in Parliament that the government will bring a bill on cryptocurrency as the existing laws to deal with issues related to cryptocurrency are inadequate.
Keep in mind that in 2018, the Reserve Bank of India (RBI) banned banks from processing cryptocurrency related transactions. However, the Supreme Court lifted the ban through a March 4, 2020 decision. Since then cryptocurrency has been operating in the country.
Now RBI has also clarified that it is working on the digital version of the rupee, and the results were expected soon. The Bill’s summary states that it has sought to create a convenient framework for the creation of Cryptocurrency Bill 2021 to be issued by the Reserve Bank of India.
How will India’s new bill on cryptocurrency affect bitcoin investors?
Analysts predict that the new cryptocurrency bill could impact some existing investors who are already investing in private digital currencies such as bitcoin in the country. The reason for this is that if the Center goes by the recommendation of the Inter-Ministerial Committee (IMC) then private cryptocurrency will be banned in the country which obviously will harm the existing crypto investors of the country.
However, it is still unclear whether the new law would include bitcoin or thorium under the list of banned private cryptocurrencies. There is also speculation that the proposed cryptocurrency bill may allow holders of such currencies to exit the asset class prior to their anticipated restriction but impose heavy penalties on its conversion into a legal asset.
Since the detailed provisions of the bill are not yet known, there is a lot of ambiguity as to whether those holding bitcoins or other cryptocurrencies should sell them. According to official estimates, nearly seven million Indians have cryptocurrencies worth more than $ 1 billion.