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The cryptospace is poised to witness a drastic change with the introduction of a new bill in the Indian Parliament, seeking to bar all private cryptocurrencies in the Asian country.
Parliamentary Bill to Ban Cryptocurrency Across India
The Indian central government is set to roll out the Cryptocurrency and Regulation of Official Digital Currency Bill in the ongoing parliamentary session. The draft is aimed at banning private digital currencies, while putting a framework in place for the launch of a digital currency by the central bank (the Reserve Bank of India).
The bill is being monitored by cryptocurrency enthusiasts across the globe, as it is a direct measure that could hamper the autonomous nature of the digital assets designed to promote decentralised finance.
Decentralised finance is one of the main underlying concepts behind the development of such assets, aimed at bringing down financial intermediaries, required to either verify or permit a financial transaction between two parties.
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The emergence along with the wide acceptance of many digital currencies as valid tokens for financial transactions has raised eyebrows of many governments across the globe. While many economies are supporting the development of cryptocurrencies, many are against, citing the associated higher risks.
A large fluctuation in the cryptospace makes it a ground for no faint-hearted as it exposes an investor to massive risks, including the risk of losing all investments at once, while magnifying the impact of leverage multifold.
While India has decided to take the ban to the parliament after the supreme court allowed investors to gain exposure in cryptocurrencies post the ban from the central bank, many other nations have issued warnings concerning the inherit risk of the cryptospace, especially for retail investors.
For example, in the recent past, the United Kingdom’s top regulator – Financial Conduct Authority (FCA) -- issued a warning that investors in cryptospace could lose all of their value. The regulator also highlighted the fact that many firms were baiting investors on the counter of promising higher returns amidst the recent crypto rally.
(Image source: ©Kalkine Group 2020)
To Know More, Do Read: Why has the UK Top Regulator issued Warning to Crypto Investors?
Though the risk is evident, many governments, including India are looking for ways to support the technology behind the cryptocurrency, i.e., Blockchain. The technology has a wide application in financial services and holds a large potential to bring a paradigm shift in the way people transact.
The bill for the ban on the digital currency space has already made the industry across India worried. Commenting on the proposed bill, Shivam Thakral (CEO BuyUcoin), one of the prominent cryptocurrency exchanges across India, has stated that the government should have considered the opinion of all stakeholders before reaching a conclusion. He added that a ban could have an impact on the livelihood of the entire workforce employed in the digital asset space.
