India’s Cryptocurrency Bill 2021

24 November 2020

The Indian Government has made a very open-ended announcement on their plans to ban “private currencies.” 

Private currencies:

The term private currency hasn’t been clearly defined by the government, but here’s our understanding —

Bitcoin, Ethereum and other such token holders, breathe a sigh of relief. You are safe. These are completely public cryptocurrencies as they are built on public blockchain networks. Transactions are traceable, however they are completely anonymous.

Private cryptos on the other hand MAY refer to coins like Monero and Dash that are private tokens. Although these are built on public blockchain networks, they conceal transaction information to provide privacy to users. 

Again, while this is just broad speculation, the term has to clearly be defined for better understanding. We are awaiting further information. 

Blanket Ban:

On November 15th 2021, top crypto companies and players had a panel meeting with Members of the Parliament. The meeting ended with the conclusion that cryptocurrencies “cannot be stopped, and hence they must be regulated”. A blanket ban would not be an option considering there are over 10 crore Indian investors with total investments crossing ₹6 lakh crore. 

From a technology perspective, a regulatory ban would not even be feasible. Transferring crypto from wallet to wallet, is at its essence no different from sharing files from one network to another. Taking these factors into account, the government will not proceed with a blanket ban.

Facilitative framework:

In order for cryptocurrencies to progress and be adopted on a macro scale, the government believes it’s in its best interest to regulate it. Lawmakers will regulate crypto to ensure its usage in a responsible and lawful manner. The law will further make provisions to support innovation in the crypto and blockchain industry. 

India’s CBDC:

The said framework has also called for creation of an official digital currency issued by the RBI (Reserve Bank of India). Countries like China, Sweden, The Bahamas, are also using CBDCs within their economy. 

ZebPay’s note to you:

Investors, there is no need to panic sell at this point of time. The provisions of the bill are still unknown to us, furthermore it has not been passed yet. It is important for you to make an informed and timely decision with all the facts on the table.

We are expecting the Cryptocurrency Bill to be in favour of the progression of the industry. The government will soon arrive at a consensus and provide more clarity on defining public and private cryptocurrency. 

In the unlikely event that certain cryptocurrencies you hold are banned, you will receive a notice period to transfer or sell your assets. You will not lose your holdings. This is in precedence of February 2021, the government planned to ban crypto entirely and gave a 3 month window for the same. However the ban was not executed. 

At the end of the day, however the situation may progress, we can promise you that we are giving utmost importance and priority to you and safekeeping your assets. We will act in accordance with laws applicable laws and regulations in this regard. 

Until then, have faith and HODL for the future. We’re sure it will be bright!

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs. The views, thoughts, and opinions expressed in the article belong solely to the author, and not to ZebPay or the author’s employer or other groups or individuals. ZebPay shall not be held liable for any acts or omissions, or losses incurred by the investors. ZebPay has not received any compensation in cash or kind for the above article and the article is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.

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