India Considers Ordinance Route for Crypto Ban and Digital Rupee Development

India Considers Ordinance Route for Crypto Ban and Digital Rupee Development

The Indian government is reportedly considering a legislative shortcut to pass the “Cryptocurrency and Regulation of Official Digital Currency Bill 2021” aimed at regulating digital currencies. The proposed bill, which could ban private cryptocurrencies and support the creation of a digital rupee issued by the Reserve Bank of India (RBI), has sparked significant concern among crypto users in India.

Legislation Through Ordinance Route

According to a report by CNBC-TV18, the government may adopt the ordinance route to expedite the process:

• The ordinance route allows the President of India to enforce a bill during parliamentary recess based on the Union Cabinet’s recommendation.
• This move is similar to an executive order in the United States.
• If adopted, the ordinance could lead to the enactment of the crypto ban as early as March 2021.

What Does the Crypto Bill Propose?

The proposed crypto bill aims to:

1. Ban private cryptocurrencies such as Bitcoin and Ethereum.
2. Establish a regulatory framework for the development and issuance of the digital rupee by the RBI.
3. Prevent illegal activities associated with cryptocurrency use.

Mixed Reactions from the Crypto Community

The news has prompted a wave of reactions from India’s crypto community:

• Kumar Gaurav, CEO of Cashaa, stated that the legislation might focus on curbing illegal activities rather than outright banning cryptocurrencies.
• Nischal Shetty, Founder of WazirX exchange, continues to advocate for the community through the #IndiaWantsBitcoin campaign on Twitter, urging crypto users to reach out to their MPs.

Nischal Shetty’s Perspective

• Shetty has been a vocal supporter of positive crypto regulation in India.
• His campaign has run for 831 days, aiming to educate policymakers about the benefits of cryptocurrency.

India’s On-Again, Off-Again Relationship with Crypto

India’s stance on cryptocurrencies has seen frequent shifts:

• In August 2020, reports suggested that the government was considering a new law to ban crypto trading.
• The Reserve Bank of India (RBI) previously issued a circular banning crypto-related banking services in 2018, which was overturned by the Supreme Court in March 2020.
• Despite resistance to private cryptocurrencies, the RBI has expressed interest in exploring a central bank digital currency (CBDC).

Implications for Crypto in India

Short-Term Concerns

• A sudden crypto ban could disrupt the thriving crypto ecosystem in India, impacting startups, exchanges, and investors.
• The lack of clarity surrounding “private cryptocurrencies” adds to the uncertainty.

Long-Term Outlook

• The development of a digital rupee could signal India’s intent to embrace blockchain technology for its monetary system.
• Regulation, rather than prohibition, could foster innovation while curbing misuse.

Conclusion

India’s proposed crypto regulation bill via the ordinance route highlights the government’s urgency to address cryptocurrency-related concerns. While the development of a digital rupee is a step forward, the potential ban on private cryptocurrencies raises questions about the future of crypto innovation and adoption in the country.

To learn more about the innovative startups shaping the future of the crypto industry, explore our article on latest news, where we delve into the most promising ventures and their potential to disrupt traditional industries.