The colour of money may be green, but its digital avatar is making the Indian government see red. Not that cryptocurrency—which refers to digital tokens stored in secure online ledgers called blockchain and traded electronically between users—have any particular color associated with it yet.
That is unless you count how new legislation might mean Code Red for millions of Indians who own and trade in this digital money. A draft bill scheduled to be tabled in the ongoing session of Parliament aims to ban “all private cryptocurrencies” and bring in a digital version of the rupee.
“Existing laws are inadequate to deal with (cryptocurrencies),” said Anurag Thakur, Union minister of state for finance, in Parliament on February 9. “The bill is being finalised and would be sent to the cabinet soon.”
Reports suggest that the government is in a hurry, and may take the ordinance route to push the law into effect. India’s financial space is keenly awaiting the final draft of the bill and the exact definition of the ‘private cryptocurrency’ that it proposes to ban. “The proposed cryptocurrency bill has created more questions than answers,” said Arjun Vijay, co-founder and COO of Giottus Cryptocurrency Exchange. The fear and uncertainty had created panic and valuation flux in the exchanges earlier this month.
“It is unclear what private cryptocurrency is, and it is an incorrect term,” said Nischal Shetty, CEO of WazirX, a crypto exchange. “Bitcoin and ethereum are public crypto built on public blockchains. Moreover, it is a myth that the Reserve Bank creating its own digital currency removes the need for other cryptocurrencies.”
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