The run-up to budget day in India is bustling with different kinds of news and opinions. FM Nirmala Sitharaman will present the budget on February 1, 2021, inside the Parliament. Undoubtedly, Budget 2021 will be focused on COVID-19 and economic recovery.
While the clear picture will only be released on Budget day, Government is also set to propose a bill to ban private cryptocurrencies in India and has also opened a window for a future framework of RBI’S very own Digital currency. The new bill has been designated as ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’.
On the other hand, Cryptocurrencies like Bitcoin and Dogecoin are making headlines around the Globe for their surging prices after a group of Reddit users started creating interest around them using social media.
What Are Cryptocurrencies?
Cryptocurrency is a digital currency based on cryptography. They are free from Government regulations and are highly decentralized. In fact, they were invented following the declining faith of people on traditional financial systems after people had to bear the financial burden of big company frauds. Many of the cryptocurrencies are based on Block-chain Technology.
Why Are They Getting Banned in India?
In 2018, after the announcement of PM Modi’s currency ban, a huge number of financial frauds using cryptocurrency came into the picture. RBI realized the lack of regulations in the cryptocurrency system and announced immediate revokement of financial transactions using digital currency. Although, in March 2020, the Supreme Court struck down the RBI ban and permitted the banks to handle cryptocurrency transactions again.
RBI’s Own Cryptocurrency?
The Central Bank is showing keen interest to develop its regulated cryptocurrency- a digitized rupee. While it is still in the explorative stage, Government and Reserve Bank Of India are working towards setting up a proper framework to create the official digital currency by the RBI – Central Bank Digital Currency (CBDC).
Being mindful of the current trends and growth in the crypto sector, the Government has also proposed certain exceptions to promote the underlying technology of cryptocurrency and its uses. Industry experts are debating over the meaning of the word ‘private’ in the bill and are hopeful for a positive outcome for the Cryptocurrency industry in India.