WazirX’s Nischal Shetty: There is panic selling, lawmakers don't want a crypto that competes with rupee

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Reacting to the Indian crypto market crash that came in the stride of a the Lok Sabha announcement of introducing a cryptocurrency bill in the upcoming winter session of the Parliament, WazirX founder Nischal Shetty said that a "lot of panic selling ensued overnight".

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 aims to prohibit all private cryptocurrencies, and was listed in the Lok Sabha's agenda for the winter session, which begins on November 29 and concludes on December 23.

While the definition of a private cryptocurrency player is unclear in the present bill, Shetty told CNBC TV18, "Lawmakers would not want a cryptocurrency which directly competes with the rupee".

He observed that the prices of all major cryptocurrencies dropped by almost 10-15 percent overnight in India. Bitcoin (Rs 40,80,590) fell by over 9.88 percent, whereas Ethereum (Rs 3,07,500) declined by close to 7 percent. Tether (Rs 71) was down by almost 11.73 percent, and Solana (Rs 15,750) declined by almost 10 percent.

His comments come amid debates over the regulation of cryptocurrencies in the country as the number of crypto enthusiasts has seen an exponential rise in the past year. WazirX's exchange crossed the 10 million mark this year, seeing a lot of investor inflow, particularly in the past 6-8 months.

In a recent tweet, the exchange also announced the fixtures of delays in trading and order cancellation, with work-in-progress to display real-time ticker price.

Former RBI Governor Raghuram Rajan also expressed his skepticism about the viability and survival of the 13,000-odd cryptocurrencies in existence today, foreseeing the sustenance of only a few. Equating cryptocurrency to the 17th century Tulip mania, he told CNBC-TV18, "If things have value only because they will be pricier down the line, that’s a bubble. A lot of cryptos have value only because there is a greater fool out there willing to buy.”

Rajan, however, said the Indian government must allow the underlying blockchain technology to flourish.