The price of bitcoin and other cryptocurrencies on Indian exchanges fell below the market average after a new announcement about the impending ban on Tuesday.
The draft law "On Cryptocurrencies and official Digital Currency" was included in the agenda of the winter parliamentary session starting at the end of the month. The document assumes a ban on all private cryptocurrencies and allows for some exceptions to promote the underlying technology. It was expected that the authorities would adhere to a moderate approach to regulating cryptocurrencies, but earlier information was received by the media from sources, while the latest information was published by the official government of India.
Among other things, the bill will allow to prepare the legal basis for the official digital currency, which will be issued by the Reserve Bank of India. In the past, the central bank has expressed "serious concerns" about private cryptocurrencies.
"When the central bank talks about serious concerns in terms of macroeconomics and financial stability, it means that much deeper factors are involved," Reserve Bank of India Governor Shaktikanta Das said at a recent conference.
According to Reuters, there are from 15 to 20 million cryptocurrency investors among the residents of India, and the volume of digital assets at their disposal is about $ 5.4 billion. At the time of publication on the largest Indian exchange WazirX, paired with the rupee, bitcoin is trading at a price of $54,900 – 3% lower than the global average. After the announcement of the impending ban, the discount exceeded 5%, but has partially decreased since then.
At the moment, only a brief description of the contents of the bill is available. Some sources still admit that a complete ban will be avoided.
"A regulatory mechanism will be established to prevent abuse in the field of cryptocurrencies," CNN-News18 reported today, citing a source in the top leadership of special services. - The authorities are concerned about clandestine transactions. A strict mechanism will be established so that law enforcement agencies can track the origin of cryptocurrencies used in illegal or anti-state activities."
WazirX CEO Nishal Shetty stressed that until more detailed official information becomes available, there will be speculation in favor of various scenarios.
"It looks like February 2021. The bill on the regulation of cryptocurrencies was again submitted to parliament. The description hasn't changed much. The plus is that now more people in power understand the principles of how cryptocurrencies work," Shetty added.