The Indian Government is planning to bring a new bill to block most cryptocurrencies in the country. During the winter session of Parliament, the government plans to introduce a bill to regulate virtual currencies that will eventually bar most private cryptocurrencies. A legislative agenda for the winter session set to begin later this month indicates that the government will allow only certain cryptocurrencies to promote the technology underlying them.
The Reserve Bank of India plans to issue the official digital currency through the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. It intends to launch its own digital currency by December. In India, as per estimates, there are between 15 and 20 million crypto investors with total crypto holdings in the range of Rs. 40,000 crore.
In India, the government considered criminalizing possession, issuance, mining, trading and transference of crypto assets earlier this year, but no legislation was introduced. Two sources told Reuters this month that the government has changed its stance slightly since then and is now looking to discourage cryptocurrency trading by imposing heavy capital gains and other taxes. According to Reuters, the plan is to ban private crypto assets in the long run, while creating a new Central Bank Digital Currency (CBDC) in the meantime.
The prime minister participated in a meeting on the future of cryptocurrencies amid concerns that unregulated crypto markets could lead to money laundering and terror financing, sources told Reuters separately. In fact, Indian Prime Minister Narendra Modi delivered a keynote address at the Sydney Dialogue in which he urged all nations to ensure that cryptocurrency does not “fall into the wrong hands”.
Aside from being the king of the crypto market, Bitcoin is also the most volatile cryptocurrency. Its price has more than doubled since the start of this year, attracting hordes of local investors. Bitcoin price in India stood at Rs. 35.04 lakh as of 9:00 am IST on November 24.
The crypto exchange WazirX has reported that the digital currency market is currently in the red – with bitcoin, ethereum, solana and binance all experiencing a drop in prices. Solana fell by 1.24 percent to trade at $4,167 and Ethereum went down by 0.86 percent to $4,167. Despite this, the “meme coins” Doge and SHIB increased in value, though not greatly; their gains were pegged at 0.30 percent and 1.64 percent, respectively, by the crypto exchange.
Factors that may contribute to the cryptocurrency slump
A recent movement of cryptocurrency from extremely old wallets has sparked speculation and apprehension from investors, leading to a possible drop in the market price, according to John Iadeluca, the founder of multi-strategy fund Banz Capital. In Forbes, Iadeluca was quoted as saying that observers are attempting to figure out what the movement of Bitcoin from the old wallets means and whether it signals a large sale of Bitcoin in the near future.
