The Bill That Caused the Massive Crypto Crash: Explained

Upcoming crypto bill aims to regulate digital currency in India

Hours after the government announced that it would introduce a cryptocurrency bill in the winter session of parliament that seeks to ban all private cryptocurrencies in the country, all crypto prices fell by 15 percent or more.

As of 11:45 p.m. on November 23, all major cryptocurrencies were down about 15 percent or more, with Bitcoin down about 17%, Ethereum 15 percent and Tether down about 18 percent.

The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 seeks to create a facilitating framework for the creation of an official digital currency to be issued by the Reserve Bank of India (RBI). The bill seeks to ban all private cryptocurrencies in the country, but will allow some exceptions to promote the underlying technology and its use.

The crypto bill – which aims to regulate the digital currency, will be introduced in Parliament during the winter session starting November 29. The bill is one of a total of 26 bills that have been listed for introduction today, according to a government statement. ,

Last week, the first ever parliamentary panel discussion on cryptocurrency was held, where a consensus was reached that cryptocurrency cannot be stopped in India, but should be regulated.

The Standing Committee on Finance meeting was chaired by Jayant Sinha of BJP, who met representatives of crypto exchanges, Blockchain and Crypto Assets Council (BACC), industry bodies and other stakeholders on 16 November.

Prime Minister Narendra Modi had also chaired a high-level meeting with officials of various ministries and Reserve Bank of India (RBI) on the issue. PM Modi urged democracies to cooperate in regulating private virtual currencies, which could put them in the “wrong hands”.

In a speech delivered at the Sydney Dialogue last Thursday, PM Modi said it is important to ensure that digital currencies are not used illegally as it can spoil the youth.

The RBI has been very reluctant to accept cryptocurrencies, expressing concerns over potential risks to macroeconomic and financial stability, and capital controls. The Securities and Exchange Board of India (SEBI) has also expressed concern about the uncontrolled growth of cryptocurrencies in India keeping in view the vulnerable retail investors.

Last week, RBI Governor Shaktikanta Das said that India needs a more in-depth discussion on the issue of cryptocurrencies. “When the central bank says that we have serious concerns from a macroeconomic and financial stability perspective, there are far deeper issues involved. I have yet to see a serious, well-informed discussion in the public space on these issues,” Mr Das had said.

Bitcoin was last trading 16.91 per cent lower at Rs 38,76,950 against the rupee, while ether was down 14.58 per cent at Rs 2,92,897.

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