The Indian government is about to propose the digital currencies and crypto regulation bill in the winter session of the Parliament that is reported to begin on November 29, which is supposed to facilitate the legalization and creation of cryptocurrencies in the market. But the government announced that it will ban all the private players in the crypto space, with a few exceptions. Just hours after this announcement was made, all crypto prices crashed by 15 percent or more.
According to reports, after the announcement, large cryptocurrencies like bitcoin were down by approximately 17 percent, ethereum fell by 15 percent, and tether was down by almost 18 percent.
The Government of India decided to table the Cryptocurrency and Regulation of Digital Currencies Bill of 2021 to regulate the present crypto landscape in the country. But after the news about the ban on private cryptos broke, the value of all major cryptocurrencies fell. The bill also mentions that RBI will issue its digital currency that will be circulated in the market by the institution. While regulators have expressed apprehensions about the effect of cryptocurrencies on the economy and national security, there is no regulation or any ban on cryptocurrencies in the country presently.
Reports suggest that there are 15 to 20 million crypto investors in India, with a total of US$5.39 billion crypto holdings. If the Centre decides to ban all cryptocurrencies, experts say that the investors will be left with two primary options- sell their assets or keep their crypto assets through wallets from offshore exchanges. There is also this looming notion that if the government bans all cryptos, the investors will be given a period of 3 to 6 months to sell off their assets.
Unfortunately, digital coins do not work like traditional currency. Even if they are banned, the investors will have plenty of options to keep their cryptos and continue to use them for payments. Cryptos are basically simple pieces of computer code that cannot be banned. Most investors in India trade on crypto exchanges but do not understand the technicalities behind it, which might prove dangerous in the future.
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