Well, the world of cryptocurrency is uncertain. But it's even more uncertain when a country plans to ban trading in cryptocurrency. Well, similar is the case with India. With an already fluctuating market, here's a new plus minus for crypto investors.
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The background of India's stand on crypto trading.
The Reserve Bank of India (RBI), in 2013, tried to dissuade people from the use of cryptocurrencies, cautioning them about the lack of a regulatory authority, risks of malware attacks, volatility and susceptibility to illicit use. It repeated the warnings twice in 2017, before banning it outright in April 2018.
But thanks to the Supreme Court's judgement (Internet and Mobile Association of India Vs RBI) of March, 2020, this ban was finally struck down on the grounds that it killed the business opportunities of cryptocurrency exchanges, taking away their rights under the Article 19(1)(g) of the Constitution of India.
So, when it was unbanned in 2020, what's the issue now?
Actually, this is the most interesting part. The Indian Government has proposed a new Bill of 2021, the essence of which is the prohibition of all private cryptocurrencies in India, with certain exceptions. Only the State-owned, ‘National Digital Currency’ would be valid. Sources say that RBI has already started developing infrastructure for it.
Major questions
Earlier also, supreme court said that the RBI failed to explore alternatives to banning the digital currency like regulating it. In opinion of some people, the whole purpose of digital currency turns void if it's regulated by a government.
Can banning others and launching a cryptocurrency by RBI be considered a fair alternative?
Also, Nasscom, the IT industry body, has spoken of the huge potential of cryptocurrencies and its potential contribution to India’s GDP.
Can banning cryptocurrency bring any positive outcome to the Nation in any way? And how will this ban impact cryptocurrency markets globally?
Information re-represented, source: The Hindu Business Line