Crypto Gets The Jitters

Cryptocurrencies

- M.G. Arun

The terse introduction to the proposed Cryptocurrency and Regulation of Official Digital Currency (CRDC) Bill, 2021, made public on November 23, has left India’s crypto-investors in a state of panic. While it was widely expected in circles familiar with India’s newfound love for crypto (see our previous cover story, titled Cryptomania) that the Centre would possibly bring in new norms to regulate cryptocurrencies, a blanket ban on all private crypto was unexpected. The bill is likely to be tabled in the forthcoming session of Parliament, which gets underway on November 29.

The introduction to the bill talks of ‘seeking to prohibit all private cryptocurrencies in India’ with ‘certain exemptions to promote the underlying technology. It is not yet clear whether the government is looking to ban crypto trading entirely, or if the ban will only apply to its use as currency. The bill also aims to create a framework for an ‘official digital currency, though experts say this is still some way off.

Former finance secretary Subhash Chandra Garg, an ardent votary of well-regulated cryptos as an asset class, said he would only seriously consider the Centre’s move after the bill was made public for consultation. “The introductory language talks about cryptocurrencies essentially as currency,” he says. “Cryptos are much bigger assets than currencies—today, they are trading platforms and create products and services.” He added that it would be a big loss for India if the bill restricts cryptos to simply currencies and implements a blanket ban.