After speculations that the government will submit a bill banning most private tokens, cryptocurrency counters on Indian exchanges dropped. According to WazirX statistics, in rupee terms, Bitcoin was down 17%, Ethereum was down 14%, Dogecoin was down almost 20%, and Polkadot was down 14%. Tether, a dollar-pegged cryptocurrency, was down about 17 percent.
“The cryptocurrency market remained incredibly volatile during the previous 24 hours,” Patel, CEO and Co-founder of Mudrex, a worldwide algorithm-based crypto investing platform, said of the present market trend.
Meanwhile, the government announced on Tuesday that the Cryptocurrency and Regulation of Official Digital Currency Bill will be introduced during Parliament’s winter session, with the goal of “prohibiting all private cryptocurrencies” while allowing for certain exceptions “to promote the underlying technology” and “its uses.”
The measure, which also establishes a framework for the Reserve Bank of India (RBI) to develop an official digital currency, comes amid a heated discussion over whether the government should outlaw private crypto cash or regulate it like stocks and bonds.
However, with a rising number of cryptocurrency investors in the nation and a blooming ecosystem of blockchain applications, outright bans on cryptocurrencies may not be the best option.
Because a cryptocurrency has no inherent worth or liquidity, banning the tokens – which may be classified as an asset, a commodity, a currency, or even security – could be problematic. Millions of individuals throughout the world might conceivably own such a currency – which are essentially non-bannable pieces of code – and yet agree to use it as a means of exchange, lending it value.
Moreover, because sending cryptocurrency from one wallet to another is effectively the same as transferring data from one computer to another, a governmental restriction may not prevent individuals from sending bitcoins to one another.
Governments, on the other hand, may always find methods to erect obstacles to such digital token transactions and admission. Because crypto exchanges are where the bulk of investors trade, blocking them is likely to drive away a portion of popular cryptocurrency users who haven’t yet explored in the technical side of crypto wallets and so forth.
According to India’s budding bitcoin ecosystem, there are over six million crypto investors in the nation who have collectively invested over a billion dollars. CoinDCX, WazirX, CoinSwitch Kuber, Zebpay, and PocketBits are among the other bitcoin firms that have joined the lobbying effort. According to a Reserve Bank of India (RBI) research, India has 300 crypto companies, the majority of which are tiny businesses. According to him, there are around five significant exchanges.