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The ‘Cryptocurrency and Regulation of Official Digital Currency’ bill will set up a framework for the Reserve Bank of India to issue an official digital currency. And it will outlaw all private cryptocurrencies like Bitcoin and Ethereum.
The government stated on Tuesday that it will introduce a new financial regulatory bill. India is on pace to prohibit all but a few private cryptocurrencies.
According to the parliament bulletin, the bill, will be submitted to parliament in the next session. It will enable exceptions to promote the underlying blockchain technology.
Thousands of peer-to-peer currencies would be handicapped by such a pre-verification technique, which thrive on being beyond the realm of official inspection.
Prime Minister Narendra Modi made his initial public remarks on the subject earlier this month. He stated that all democratic nations must work together and ensure that Bitcoin “does not wind up in the wrong hands, corrupting the children.”
The new restrictions, according to an industry source who appeared at a separate parliamentary panel hearing on Monday, are anticipated to hamper bitcoin marketing and advertising. It will also help in decreasing its attraction to individual investors.
Two sources told Reuters that the government is considering classifying cryptocurrency as an asset class rather than a currency, as desired by crypto exchanges.
However, according to Reuters, the idea is to eventually restrict private crypto-assets. At the same time pave the way for a new Central Bank Digital Currency (CBDC).
The Reserve Bank of India plans to establish the CBDC by December. Despite having expressed “severe reservations” about private crypto.
Bitcoin is the most popular cryptocurrency. It is currently trading at more than $60,000 (€53,000). Bitcoin has had an increase of more than three folds in value since the beginning of the year. Which has resulted in drawing of a rush of local investors.
There are no official numbers, but industry estimates place the number of cryptocurrency investors in India at 15-20 million. And total crypto holdings of over 400 billion rupees (€4.77 billion).