The Indian government has issued a broad declaration about measures to outlaw “private currencies.”
Private currencies
The government hasn’t defined the word “private currency,” but here’s our take on it:
Bitcoin, Ethereum, and other token holders may exhale a sigh of relief. You are secure. Because they are developed on public blockchain networks, these cryptocurrencies are totally open to the public. Transactions can be traced, but they are entirely anonymous.
On the other hand, private cryptos may refer to private token currencies such as Monero and Dash. Even though they are constructed on public blockchain networks, they mask transaction information to provide users with privacy.
Again, while this is only speculative, the phrase must be well defined for greater comprehension. We’re waiting for more information.
Blanket Ban
On November 15th, 2021, prominent crypto businesses and players met with Members of Parliament in a panel discussion. The conference concluded that cryptocurrencies “cannot be prevented, and hence they must be controlled.” Given that over 10 crore Indian investors with cumulative investments over 6 lakh crore, a blanket ban would not be an option.
A regulatory prohibition would be impossible to implement technologically. Transferring cryptocurrency from wallet to wallet is essentially the same as sending data from one network to another. Taking these concerns into consideration, the government will not impose a blanket ban.
Facilitative framework
The government considers that it is in its best interest to regulate cryptocurrencies to progress and be used on a large scale. Legislators will regulate cryptocurrency to guarantee that it is used responsibly and legally. The bill will also include rules to encourage innovation in the crypto and blockchain industries.
The CBDC framework in India has also advocated for introducing an official digital currency issued by the RBI (Reserve Bank of India). CBDCs are also being used in the economies of China, Sweden, and The Bahamas.
LendenX’s standpoint
Investors, there is no need to panic sell at this moment. The bill’s details are yet unknown to us, and it has not yet been passed. You must make an informed and timely decision based on all of the information.
We anticipate that the Cryptocurrency Bill will be favorable to the industry’s advancement. The government will soon reach an agreement and clarify the distinction between public and private cryptocurrencies.
If particular cryptocurrencies you own are outlawed, you will be given a grace period to transfer or sell your holdings. You will not lose your investments. This comes on the heels of the government’s decision to outright prohibit cryptocurrency in February 2021, with a three-month timeframe to do so. However, the prohibition was not carried out.
At the end of the day, no matter how the issue develops, we can assure you that we are providing you with our undivided attention and prioritising the protection of your assets. In this regard, we shall act in compliance with existing laws and regulations.
Have faith and HODL for the future. We’re sure it will be bright!