Most of the cryptocurrencies are seeing a decline after the news of the central government putting a ban on cryptocurrencies. This morning at 10 am bitcoin is seeing a drop of more than 17%. For cryptocurrencies, the government will introduce a bill in Parliament on November 29. The bill seeks to ban all types of private cryptocurrencies.
However, the central government can also give some relaxation to promote cryptocurrency technology. It is not yet clear which cryptocurrencies will be relaxed. Due to this, the Reserve Bank of India will get a convenient framework to issue its official digital currency.
A total of 26 bills, including the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, will be introduced. The cryptocurrency-related bill is at number 10 on the list. There are 15 to 20 million users of cryptocurrencies in India. All these users can be affected by this bill becoming law.
Cryptocurrency is not controlled by anyone, it is a completely decentralized system. No government or company can control this. That's why there is instability in it. It works on blockchain technology and distributed systems, which can neither be hacked nor tampered with.
Bitcoin, Ethereum, Binance Coin, Tether, and Cardano are all referred to as "cryptocurrencies." These are open ledgers that can be used to track transactions back to the crypto wallets that were used. Whether these cryptocurrencies fall within the ambit of what the Bill defines is not known yet.
Zcash, Monero, Verge Currency, Dash, and Zen are examples of privacy-focused crypto coins. These coins use techniques like not saving transaction details on the decentralised ledger, randomising wallet addresses, integrating with services that hide your IP address, and unlinking transactions to try to hack transactions.
Underlining the impact of the Digital Age, Prime Minister Narendra Modi said "we are in a time of change". It only happens once in a generation, when technology and data have emerged into new weapons. " Take crypto-currency or bitcoin for example. "It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth," said PM Modi.
Currently, there is no regulation regarding cryptocurrencies in the country. Because of this, Prime Minister Narendra Modi had a meeting on cryptocurrencies with senior officials. PM Modi suggested that stronger regulatory measures should be taken. The government believes that cryptocurrency is being used for terror funding and the movement of black money due to a lack of regulation.
The statement of Reserve Bank of India (RBI) Governor Shaktikanta Das also came to the fore. Das had said at the SBI conclave, "When RBI says that cryptocurrencies have macroeconomic and financial stability concerns, then this issue needs to be discussed in depth."
A Central Bank Digital Currency (CBDC) is a digital version of a country's authorised currency (such as the rupee, dollar or euro). It is issued by the central bank. Also, it gives a guarantee. It is one to one exchangeable as well as fiat currency. With this, the transaction is done without any intermediary or bank.
The first meeting of the parliamentary panel on cryptocurrency, led by BJP leader Jayant Sinha, was held following the PM's meeting. The consensus reached in this meeting is that cryptocurrencies cannot be stopped, but should be regulated.