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Cryptocurrency Bill 2021 - How it will impact Bitcoin investors in India

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Staff Writer, TLR

Published on July 14, 2023, 17:40:59


cryptocurrency, bitcoin, investors

Finance Minister Sitharaman said in the Rajya Sabha on February 9 2021 that a high-level Inter-Ministerial Committee (IMC) has been created under the Chairmanship of Secretary (Economic Affairs) to research the issues related to virtual currencies and that it will come up with recommendations on what steps should be taken. The IMC's report recommends that all private cryptocurrencies, except for those that are released by the state, should be prohibited in India.

As of April 2018, the Reserve Bank of India has also publicly acknowledged that it is working on a digital version of the rupee, and preliminary results were anticipated in the coming months. According to the summary of the bill, the bill's purpose was to "create a facilitative framework for the creation of the digital currency to be issued by the Reserve Bank of India".

Also, in 2018, the Reserve Bank of India (RBI) imposed a ban on banks handling cryptocurrency transactions. but, as decided by the Supreme Court in their decision dated March 4, 2020, the ban has been lifted. It has been working in the country since then.

Investors who already invest in private digital currencies like bitcoin in the country may be adversely affected by the new cryptocurrency bill. This is because if the Centre accepts the IMC's advice and bans private cryptocurrencies, it will cause a significant loss to the country's current cryptocurrency investors. There is, however, still some confusion about whether or not the law would extend to cryptocurrencies other than Bitcoin and Ethereum, such as Ethereum Classic or ETC.

While the cryptocurrency bill is being debated, speculation is prevalent that the law would include enabling investors to exit the market before the proposed ban, but it will impose a significant penalty on changing the investment to a legal asset.

Due to the lack of clarification around the specifics of the bill, it is difficult to tell whether or not those who possess Bitcoins or other cryptocurrencies can sell them. Around 70 million Indians have as much as $1 billion worth of cryptocurrencies, according to the official figures.