The crypto market saw a major crash after the news about the Indian govt banning the private crypto digital asset and introducing RBI digital coin during the Winter Session starting Nov 29. The Cryptocurrency & Regulation of Official Digital Currency Bill, 2021, would “provide for some exceptions for promoting the crypto technology and its purposes.”
In July, the RBI announced that it is working on introducing its own digital currency, under the name of Central Bank Digital Currency (CBDC).
According to a bulletin provided by the Lok Sabha, the measure is one of 26 bills scheduled for discussion during the winter session in the parliament. The Cryptocurrency sector is confident that cryptocurrencies will not be outright banned.
T Rabi Sankar, RBI Deputy Governor, said that CBDC is a digital form of legal money issued by a central bank. It functions in the same way as fiat money and may be exchanged for fiat money in a one-to-one ratio. CBDC will be a virtual currency, completely different from the private virtual currencies that have proliferated in the recent decade. Private virtual assets are opposed to the traditional understanding of money.
Prime Minister Narendra Modi presided over a conference to examine the future of crypto and showed concern over bitcoin slipping into the wrong hands. The Centre has also stated that it intends to make new modifications to income tax regulations to gain Cryptocurrency earnings within the tax net, and that will be done at the next year Union Budget.
RBI, on many occasions, had said that private cryptocurrencies like Bitcoin, Dogecoin, and ETH could pose a massive risk for the economy if not regulated. In March this year, the Supreme Court struck down the circular by the RBI forbidding banks along with businesses regulated by it from providing services related to virtual currencies, which was issued on April 6, 2018.