What is Cryptocurrency Bill 2021

What is Cryptocurrency Bill 2021

  • Experts have hypothesized that the new cryptocurrency bill could have an effect on some existing investors who already are investing in private digital currencies such as bitcoin in the nation.
  • The bill, which intends a blanket prohibition on all private cryptocurrencies, will also lay the foundation for a formal digital currency with ties to the RBI that can restrict it, the source noted.
  • Central’s “Cryptocurrency Bill” comes days after the vehicle manufacturer Tesla, led by billionaire Elon Musk, revealed a $1.5 billion investment in Bitcoin with proposals to recognize cryptocurrency from customers buying their electric vehicles. This has driven digital currency to an all-time peak.
  • The Indian Govt revealed that it will bring in a new bill on cryptocurrencies (Cryptocurrency and Regulation of the Official Digital Currency Bill, 2021) to the current budget session of the Parliament.
  • Finance Minister Nirmala Sitharaman said that the Inter-Ministerial Committee (IMC) has proposed a ban on private cryptos in India, such as Bitcoin, India. In addition, the very same committee set up an official digital currency to be properly regulated by the RBI.
  • “A high-level Inter-Ministerial Committee (IMC) created under the Chairmanship of Secretary (Economic Affairs) to analyses the problems related to virtual currencies and future strategies actions to be taken in the matter mentioned in its document that all private virtual currencies, except any virtual currencies required by the government, will be barred in India,” said FM Sitharaman in Rajya Sabha.
  • In recent times, the Minister of State for Finance Anurag Thakur also notified the Parliament that the govt would bring a bill on virtual currencies, as the existing legislation is inadequate to deal with cryptocurrency problems.

The cryptocurrency bill has been mentioned for introduction, consideration, and passing. As of now, it cannot be said when the bill is passed. When is the bill likely to pass?

Is bitcoin going to ban?

  • With the bill indicated for the introduction, the fate of the holders of Bitcoin is in equilibrium. Since the detailed provisions of the bill have not yet been publicly disclosed,
  • it cannot be said for specific that it will stop the cryptocurrency juggernaut, which did receive a fresh boost after US automaker Tesla purchased about USD 1.5 billion worth of cryptocurrencies.

How will India’s new cryptos bill have an impact on Bitcoin investors?

  • Analysts have believed that the new cryptocurrency bill could have an impact on some existing investors who are already investing in private digital currencies like bitcoin in the nation.
  • It is because if the Center follows the recommendation of the Inter-Ministerial Committee (IMC), then private cryptocurrencies will be prohibited in the nation, which will understandably cause losses to exist crypto investors in the country.
  • Even so, it remains unclear whether the new law will include Bitcoin or Ethereum in the list of prohibited private digital currencies.
  • It should be acknowledged that the Reserve Bank of India prohibited banks from handling cryptocurrency transactions in 2018. Even so, the Supreme Court, the empty judgment of 4 March 2020, lifted the ban. Cryptocurrency has been operating in the nation since then.
  • Now, the Reserve Bank of India has also explained that it is working on a digital version of the rupia, and the results were expected soon. An analysis of the bill mentioned that it sought to “create a facilitative structure for the creation of the digital currency to be issued by the RBI”
  • Speculation is also high that the presented cryptocurrency bill may allow holders of such currencies to exit the asset class prior to its anticipated ban, but may place a significant penalty on its transformation to a legal asset.
  • Because the detailed integration of the bill is not yet known, there is a lot of ambiguity as to whether or not those holding bitcoins or other cryptocurrencies should sell them. According to official estimates, about seventy Lakh Indians hold cryptocurrencies valued at more than $1 billion.

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