Panic coupled with optimism grips investors as the House of Representatives prepares the table for the crypto bill

The industry is particularly concerned about “private cryptocurrencies,” which are likely to be banned under the bill’s understanding.

“I want to understand the possible impact of the new regulations. If the government says to ban all private cryptocurrencies in India, does that include Bitcoin, Polygon, Ethereum etc?” A crypto user shared her concerns on a Telegram channel.

The fear found an echo in another voice. “I think they will allow network utility coins like Ethereum, MATIC, NEAR, etc. Others may also be subject to high tax volume and those with high trading volume will be banned,” another user shared.

These crypto-focused Telegram channels were flooded with concerns from crypto users last night after a government announcement stated that the long-awaited cryptocurrency bill will be tabled in the winter session of Parliament starting on November 29th.

While investors and crypto companies wait for clarity, not much is known about what is in the final bill. There was a bloodbath on crypto exchanges as users started selling their holdings following the government’s announcement. Bitcoin lost over 17 percent, Ethereum almost 15 percent and Tether almost 18 percent.

“The bill also aims to ban all private cryptocurrencies in India; However, it allows certain exceptions to promote the underlying technology of cryptocurrency and its use,” said the government notice published on Tuesday.

https://twitter.com/ashish343/status/1463212127599034371?t=VBsDGg9Oiq4h_PjkQBQ9Zg&s=08 This wording is the same as that formulated in February 2021, which said the bill would be tabled in the Budget and Monsoon sessions. The unchanged language has sparked mixed reactions in the industry. While on the one hand it could be a copy-paste exercise, on the other hand there will be no industry if the bill actually aims to ban private cryptocurrencies.

“While the description of the bill appears to be the same as it was in February 2021, several notable events have occurred since January. First, the Parliamentary Standing Committee invited a public consultation, and then our Prime Minister himself came forward and called for crypto regulations in India,” emphasized Nischal Shetty, founder of crypto exchange WazirX.

“It is important that all democratic nations work together on this (bitcoin) and ensure that it does not fall into the wrong hands, which can corrupt our youth,” Prime Minister Narendra Modi said days before issuing the latest notice.

The industry is particularly concerned about “private cryptocurrencies,” which are likely to be banned under the bill’s understanding.

The general understanding is that private cryptocurrencies refer to all coins that are not issued by the government – including all major names like Bitcoin, Etherium, Doge Coin, etc., but there is no clear definition from the government regarding the meaning of private cryptocurrencies.

The Reserve Bank of India (RBI) is working on launching a central bank digital currency (CBDC) – a digital version of the Indian rupee.

While the industry has faced challenges over unclear regulations in recent years, it appears to have gained confidence this time around after Parliament’s Standing Committee on Finance invited industry representatives on November 15 to discuss how it operates.

The increased participation of investors and the considerable momentum in the last year also strengthen the hope that the draft law will be in favor of the industry. According to industry estimates, around two million people in India have invested in cryptocurrencies.

“This time we have better context than the last time the bill was scheduled for submission. This time we are more confident,” said Sathvik Vishwanath, CEO and co-founder of exchange Unocoin. “The wording alone will not define anything. We should wait and see what the bill actually contains.”

https://twitter.com/NairSharan/status/1463342225593552897?t=0KrUEOVWpwQsgmZs0pHQ8Q&s=08 At a meeting between the Parliament Standing Committee and the industry, concerns over misleading advertising were raised and questions were asked to industry representatives on how cryptos will benefit India. Industry was asked to submit written responses to the questions.

According to a Lok Sabha notification on Tuesday, the bill is listed among 26 other items that will be discussed in the winter session of Parliament.

However, RBI Governor Shaktikanta Das has claimed that the regulator has several concerns regarding cryptocurrencies and has conveyed them to the government.

Sanghamitra Kar

Priyanka Iyer

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