Indian Government is planning to introduce a new bill that will ban all the private cryptocurrencies in the country. The government has plans to ban cryptocurrencies such as bitcoin and Ethereum and to introduce a national cryptocurrency. The new bill is planned to be introduced in the lower house of the parliament.
History of Cryptocurrencies in India
This bill is not considered to be the first time the Indian Government has been against the purchase of digital assets in the country. In the year 2018, the Indian government panel had proposed to ban all the cryptocurrencies in the country and had suggested that the offenders would be put in jail for a period of 10 years.
In the same year, the finance minister Arun Jaitley had said that The Government of India doesn’t consider the cryptocurrencies legal. He said that it is not considered as a digital asset or a payment method and that the Government would take all legal actions to stop the use of these digital coins for payment activities. The government had stated that it was not approved by them and it was illegal.
The monetary regulator of the country had later banned the use of cryptocurrencies in the year 2018. The ban was after the reporting of a number of fraudulent activities related to cryptocurrencies. However, the ban was later removed by the Supreme Court of India in March 2020.
Reasons for ban of Cryptocurrency in India
There has been a lot of anxiety and fear across the country regarding the ban of cryptocurrencies. It is said that there are around 75 Lakh Cryptocurrency owners in the country. Their holdings have a worth of up to $1 billion.
One of the other major reasons for the ban of cryptocurrencies in the country is because of the Aadhar card. It is said that the ban of cryptocurrencies would have been already put in action several years ago by the Government without any intention.
The unintentional ban is supposed to be when the government introduced the Jan Dhan-Aadhar-Mobile trinity during the rule of the Modi Government in India. Aadhar was a huge project undertaken by the country which required the citizens of India to register into the financial system of the country by using a unique identification number. The Government wanted to use that network to directly send subsidies.
Brent Johnson who is the Chief executive of the San Francisco Santiago Capital which is U.S based company has said that Aadhar could be the reason for the Government to introduce the new bill in the country. Because the Aadhar card was a project to ensure that all the citizens had an account with the government, their ID’s and payments.
As of March 2020, the unique identification authority has issued over 122 crore Aadhar cards in the country which covers up to 90% of the Indian population. Out of 110 crore bank accounts in the country around 96 crore accounts have been linked to Aadhar cards according to UIDAI.
Brent Johnson also added that, if the mobile network connection is taken into consideration regarding the Aadhar card it would seem like it is safe for the Government of India to create a network to issue of its own cryptocurrency in the country which would be accessible to everyone.
Cryptocurrency and Regulation of Official Digital Currency Bill
The bill that will be introduced is called as “Cryptocurrency and Regulation of Official Digital Currency Bill”. The main intention of the bill would be to create an easy way to provide support to the new digital currency introduced by the Reserve Bank of India.
The bill also concentrates on banning all the private cryptocurrencies in India. The ban will also improve the chances to increase the demand of the National Currency issued by the Government of India.
It is considered that there will be certain exceptions because the Government of India would require the underlying technology of the bill which is the blockchain technology.
Brent Johnson said that the government would most probably want to use the advantage of Aadhar cards to issue its own cryptocurrency and would want to avoid competitions.
The recent move of the Reserve bank of India which allowed the retail investors of the country to register with e-kuber. It helps the retail investors to open an account with the portal which helps in purchasing government bonds in primary and secondary markets.
This new portal has raised a curiosity amongst the people in the country. The market participants feel that this would be the portal for issuing the National Digital currency in the country.
In Which countries Bitcoin is illegal?
Inspite of its rising popularity, cryptocurrencies are illegal in these countries. Saudi Arabia, Algeria, Bolivia Algeria, Ecuador, Bangladesh, Nepal, Macedonia.
Who is the richest Bitcoin owner?
Satoshi Nakamoto, the founder of Bitcoin, rumored to own around 1 million Bitcoins.
How safe is Cryptocurrency?
Cryptocurrency is considered as one of the riskiest digital currency.
The Deputy Governor of RBI, BP Kanungo has told that an internal part of the Reserve Bank of India is working on the model for the cryptocurrency and that RBI would soon give more information regarding it. If they don't ban cryptocurrency, many investors might get a new revenue stream and most of the youth will invest in it. However, the government has experts who knows better than us. Hence, we must respect whatever decision they take.