{"id":103197,"date":"2021-04-24T10:04:09","date_gmt":"2021-04-24T04:34:09","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=103197"},"modified":"2021-04-24T11:59:09","modified_gmt":"2021-04-24T06:29:09","slug":"future-of-cryptocurrencies-in-india","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/future-of-cryptocurrencies-in-india\/","title":{"rendered":"Future of Cryptocurrencies in India"},"content":{"rendered":"<p><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Synopsis<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span><span style=\"font-weight: 400;\">The Government is planning to ban all private <a href=\"https:\/\/forumias.com\/blog\/crypto-currencies-in-india\/\" target=\"_blank\" rel=\"noopener\">cryptocurrencies in India<\/a> while supporting an <a href=\"https:\/\/forumias.com\/blog\/introducing-national-digital-currency-in-india-explained-pointwise\/\">RBI-backed cryptocurrency<\/a>.<\/span><\/p>\n<h5><b>Background:<\/b><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 bans all private cryptocurrencies.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It lays down the regulatory framework for the launch of an \u201cofficial digital currency\u201d.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Further holders of private cryptocurrencies will have a 3-6 month exit period before banning the trading, mining, and issuing of cryptos.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Reserve Bank of India is also working on a Central Bank digital currency (CBDC) using DLT (Distributed Ledger Technology).<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">DLT is a digital system for recording the transaction of assets. It records the transactions and their details in multiple places at the same time.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Unlike traditional databases, distributed ledgers have no central data store or administration functionality.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h5><b>Rationale behind such proposals<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<ul>\n<li><b>Check on Volatility: <\/b><span style=\"font-weight: 400;\">Private Cryptocurrencies are too volatile and pose a threat to India\u2019s financial stability. A fiat currency shouldn\u2019t portray such volatility. For instance, Bitcoin\u2019s price has risen more than 10-fold over the last year due to:<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Increased institutional exposure to Bitcoin<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Global progress in fostering a friendlier legislative environment for cryptocurrencies<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Supply reduction coupled with increasing demand.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><b>Curb Illegal Activities<\/b><span style=\"font-weight: 400;\">: In April 2018, RBI banned banks and other regulated entities from supporting crypto transactions after digital currencies were used for frauds. In March 2020, the Supreme Court clarified that crypto transactions were not illegal in India.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Ascertaining the Magnitude of Undisclosed Holdings<\/b><span style=\"font-weight: 400;\">: Once private currencies are banned, then all investors would have to declare their true digital holdings in order to exit within the permissible window.<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As per an unofficial estimate, Indian investors hold around $1.5 billion (Rs 10,000 crore) in digital currencies.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h5><b>Way Forward<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The government needs to clear the uncertainty regarding the legal status of cryptocurrencies in the minds of Indian investors.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Further, it also needs to ascertain the economic and social impact of closing startups that function on private cryptocurrencies like Unocoin, Zebpay, etc.<\/span><\/span><\/span>&nbsp;<\/li>\n<\/ul>\n<p><b>Source<\/b>: <a href=\"https:\/\/indianexpress.com\/article\/explained\/cryptocurrency-bitcoin-rbi-7285249\/\">indianexpress<\/a><\/p>\n<hr \/>\n","protected":false},"excerpt":{"rendered":"<p>Synopsis:\u00a0The Government is planning to ban all private cryptocurrencies in India while supporting an RBI-backed cryptocurrency. Background: The proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 bans all private cryptocurrencies.\u00a0 It lays down the regulatory framework for the launch of an \u201cofficial digital currency\u201d.\u00a0 Further holders of private cryptocurrencies will have a 3-6&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/future-of-cryptocurrencies-in-india\/\">Continue reading <span class=\"screen-reader-text\">Future of Cryptocurrencies in India<\/span><\/a><\/p>\n","protected":false},"author":10322,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[1428],"class_list":["post-103197","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-st_2","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1700502750},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/103197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10322"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=103197"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/103197\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=103197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=103197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=103197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}