Cryptocurrency status in India: Past, Present and Future
A cryptocurrency, cryptocurrency or crypto is a digital currency used as a medium of exchange, an individual coin ownership records are stored in a ledger format in computerized database. That’s done using cryptography to secure transaction records, moreover to control the creation of additional coins and to verify the transfer of coin ownership.
It exists in digital form and not issued by a central authority. It works under decentralized control which is opposed to centralized digital currency and central banking systems. Cryptocurrency first appeared as Bitcoin, in year 2009 by an open source.
It was announced in the Budget Speech of year 2018-19 that the Government does not consider crypto-currencies legal tender or coins and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system. However, it was also said that the Government will explore the use of blockchain technology for ushering in digital economy, This despite numerous appeals from the industry, and a failed attempt by the Reserve Bank of India (RBI) at sneaking in a ban in 2018 by preventing banks from touching crypto. The Supreme Court ruled that ban was unconstitutional last March.
In India, at present there is no law, rules, or regulations governing the cryptocurrency and its mining yet. But law regarding the same will be coming soon.
But there is no official news of BAN yet, but as we know changes doesn’t need an appointment. It may happen that with the blink of an eye that official news regarding the same is spreading as fire across the news.
Current status of Cryptocurrency in India
Soon India going to bring a law banning cryptocurrencies, they will be fining those who will be trading in the country and even those are holding such digital assets.
This banning possesses the potential of blowing millions of investors piling into the red-hot asset class.
The bill will be one of the world’s strictest policies against cryptocurrencies, it would criminalize the possession, issuance, and mining, trading and transferring crypto-assets as per the current planning of the Government.
Government agenda is asking for banning private virtual currencies such as bitcoin and to build a framework for an official digital currency.
After the statements of government officials, investors’ hopes has taken a flight; they’re predicting a market boom with respect to digi currencies.
Instead, the bill holders of cryptocurrencies will be given up to six months to liquidate, after which penalties will be levied on the traders, holders, and miners.
If the ban is legalized then India would be the first major economy to make holding cryptocurrency illegal by penalizing the possession as well.
As China one of the major economies of the world has also banned the mining and trading of the same but has not penalized the possession yet.
In India, even after the opinion presented by the government stating threats of a ban, transaction volumes are skyrocketing; around 8 million investors are now holding 100 billion rupees ($1.4 billion) as crypto-investments, according to the estimates. Still the figures may appear different as there is no official disclosure of data yet.
Should you invest despite risks?
Some of us believe in taking risks despite knowing its depth. In that case an amateur who wants to invest in crypto, the most important thing which needs to consider in mind is that that crypto is a high risk, high reward investment option.
One should invest based on their risk appetite, after duely considering due diligence on the project. It is recommended using legitimate exchanges that follow KYC and AML guidelines. Don’t get lured with a dream of an overnight success, that may end up as a scam.
Remember not everything that shines is gold.
What is the future of cryptocurrency in India?
In India, the regulators and governments have been sceptical about the virtual currencies and are apprehensive about the associated risks.
As the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is already pipelined for creating a facilitative framework for creation of an official digital currency that will be issued by the RBI, the road ahead would be cumbersome for private cryptocurrency as stated by the aforesaid Bill, it will prohibit all private cryptocurrencies in India. But in exception will allow certain companies to promote the underlying technology of cryptocurrency, and its uses.
However, it is believed that in the future cryptocurrency will be an exciting mode of investment in India.
As our Prime Minister talked positively about blockchain, and it seems that he’ll ensure the Indians will go hand in hand with global trend of investment. Slowly and steadily, awareness among people are being created by warning them as well about their wants to pursue a career in Blockchain. Positive regulations are given a big push for adopting Crypto.
Startups are encouraged to come ahead with the idea for crypto mining and alternatives of banning the existing cryptos, it seems, as Government of India is thinking of launching a new variant of the cryptocurrency themselves. They will do this by banning the existing mining of cryptocurrency.
The author of the above article is Sneha Bhalotia.
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