Cryptocurrency (Representative image)
“I want to understand the possible effects of the new regulations coming in. When the government says outlaw all private cryptocurrencies in India, does it include the likes of bitcoin, polygon, ethereum etc?” a crypto user shared her anxiety on a Telegram channel.
The anxiety found an echo in another voice. “I think they’ll allow network utility coins like ethereum, MATIC, NEAR etc. Also others might be put under heavy taxation volumes, and the ones with heavy trading volumes will be banned,” shared another user.
These crypto-focused Telegram channels were swamped with concerns last evening from crypto users after a government notification said that the long-awaited Cryptocurrency Bill was set to be tabled in the Winter Session of Parliament, which will begin on November 29.
While investors and crypto companies are awaiting clarity, not much is known about what the final Bill says. Crypto exchanges saw a bloodbath as users have started selling their holdings after the government notification. Bitcoin was down over 17 percent, ethereum nearly 15 percent and Tether by almost 18 percent.
This wording is the same as the one that had come up in February 2021, saying that the Bill would be tabled in the Budget and Monsoon sessions. The unchanged language has drawn mixed responses from the industry. While on one hand it could be a copy-paste job, on the other, if the Bill actually aims to ban private cryptocurrencies, there will be no industry.
“It is important that all democratic nations work together on this (Bitcoin) and ensure it does not end up in the wrong hands, which can spoil our youths,” Prime Minister Narendra Modi said days before the last notification was issued.
The industry is concerned mainly about ‘private cryptocurrencies’ which are likely to be prohibited as per understanding of the Bill.
The general understanding is that private cryptocurrencies refer to any coins that are not issued by the government – encompassing all the major names like Bitcoin, Etherium, Doge Coin etc, but there is no clear definition by the government as to the meaning of private cryptocurrency.
The Reserve Bank of India (RBI) is working to bring in a Central Bank Digital Currency (CBDC) – a digital version of the Indian rupee.
While the industry has faced challenges in terms of unclear regulations over the past few years, this time it seems to have gained confidence after the Parliamentary Standing Committee on Finance invited industry representatives on November 15 to discuss their ways of functioning.
The increased investor participation and the significant momentum over the last one year too is adding to hopes that the Bill will turn out to be in favour of the industry. According to industry estimates, around two crore people have invested in cryptocurrencies in India.
“We have better context this time than the last time the Bill was listed to be tabled. This time we are more confident,” said Sathvik Vishwanath, CEO and co-founder of exchange Unocoin. “The wording alone will not define anything. We should wait and watch to see what the Bill actually contains.”
At a meeting between the Parliamentary Standing Committee and the industry, concerns were raised around misleading advertising and questions were posed to industry representatives on how cryptos will benefit India. The industry was asked to file written replies to the questions.
The Bill is listed among 26 other items which will be discussed in the winter session of Parliament, according to a notification issued by the Lok Sabha on Tuesday.
RBI Governor Shaktikanta Das has, however, maintained that the regulator has several concerns around cryptocurrencies and has conveyed those to the government.