Amid heightened jubilations and fanfare, Indians have awakened to the sheen of cryptocurrency and the immense limelight has sailed into it all across the country with movie icons depicting this as a lucrative investment option at a time when the Indian economy is dented with price-hike and unemployment.
But, the Indian government and RBI (Reserve Bank Of India) maintain a radical difference in opinion regarding this, while the former has softened its stance on it. A meeting is held recently in the presence of PM Modi where RBI continued with its hard stand on crypto-currency even as the sector’s growth rate is high in India, in recent months. The governor of RBI Shaktikanta Das has put down any favours in favour of this and expressed the central bank’s concerns.
The Modi government, on the other hand, alongside all the departments support robust regulatory control on cryptocurrency in a bid to check money laundering and rule out any intention to ban it completely.
The meeting took place on Saturday, November 13th, after which, sources revealed to the news agency PTI, “The government is cognizant of the fact that this is an evolving technology, it will keep a close watch and take proactive steps.
There was consensus also that the steps taken in this field by the government will be progressive and forward-looking.”
Following a sudden rise in bitcoin prices, sentiments went high for it in India but RBI has emphasized, time and again its strong views for it. RBI considers this as a major impediment to macroeconomics and the nation’s financial stability as such lies beyond any regulations put forth by central banks.
The RBI is suspicious of the total number of investors taking a dip in its pond and its market size and worth, as is claimed.
Further in the funnel, such can weaken Indian ruppee, when the strength of those investing in digital currency grows large, few would think about savings based on ruppee like provident fund and the latter type of savings would fade gradually. As a result, as is feared, banks would not be able to lend to their customers.
Besides, since such is not regulated and controlled and is untraceable as per them, such would be beyond any taxation and such would again be a danger to ruppee. The most important aspect which raises our eyebrows is the fear of money-laundering as well as other illegal activities.
Clearly, owing to such reasons, those thinking about cryptocurrency are in the dock for hacking, scams and inflicting losses as crypto coins are highly whimsical.
This was in 2018 that RBI made it hard for banks to close deals using cryptocurrencies which was a blow to the crypto industry in the country. But then, SC in March 2020, invalidated the RBI decision which banned cryptocurrency. Prompted by this, RBI had set up an internal board to look into the matter and to think about alternate ways in a similar digital arena. The panel is expected to give recommendations by the end of this year.
The Road Ahead:
What alley lies ahead? As RBI’s stand is still motionless, new possibilities are being explored to float a digital currency across the Indian horizon. In light of the towering sheen garnered by private digital currencies and virtual currencies during the past decade, going by the PTI (Press Trust of India), RBI officially declared rolling out a digital currency to counter bitcoin.
Irrespective of limitations and potential risks involved, Indians have been mobilized to invest in these in a large number (herd instinct). An advertisement in a newspaper indicated Indians have inverted pockets to the tune of somewhere around 6 trillion Indian ruppees in favour of a range of cryptocurrencies. However, such a figure is dubious too as calculation at BrokerChoosers reflect the amount as 100.7 million and WazirX CEO Nishal Shetty’s analysis showcase 15-20 million investors on Indian shores.
Just yesterday, November 15th, Parliamentary Committee on finance was enlightened by finance stalwarts, tech aficionados and associations while MPs remained vocal too, about cryptocurrency. They unanimously opposed the idea of banning it altogether but stressed ways to bring it under some sort of regulation. Additionally, they highlighted opportunities lurking around it alongside the challenges which are faced by the government and those holding stakes in it. Jayant Sinha headed the panel who is also an ex-Minister of State for Finance.
Interestingly, cryptocurrency’s universal and dynamic nature is acknowledged which now puts the focus upon ways to regulate it. It was initially planned to ban it altogether but the scenario is way different now as hefty investments have been placed into it.
During The Gathering, the Following Five cuss elements were discussed :
Who would be the regulator?
We are likely to witness a host of regulations for cryptocurrencies in the country but such is in pipeline. The government is expected to institute a body with full support from experts. Though arguments were raised in favour of RBI this is in complete opposition to it. Hence, the mist is likely to get dispelled in days to come, if a new panel would be appointed by the government or any existing group will look after it.
For months, across the media platforms, the hype has been there about a typical crypto bill likely to be unrolled. In the Winter Session of Parliament, the government plans to decode its program, which would carry a remedy to investors too.
Advertisements And Branding Caught In Blame Game:
Without any cloud, the showbiz industry has been pivotal in flinging the gloss towards crypto-platforms in recent times, in fact just before Diwali. Exclusivity to bitcoin, which is regarded as the money booster mechanism attracting masses to invest, this issue got into the discussion but for the wrong reasons.
No soft corner is developed from RBI still, about it. During the Parliamentary committee gathering, it raised doubts over the numbers unravelled by crypto-exchange platforms and emphasized other aspects which ought to be considered. Even before the gathering, the RBI governor expressed concerns that such digital tokens can undermine any financial framework due to the absence of any regulation.
Protection To Investors:
At most of the time during the discussion, investors’ protection was accentuated upon as members of crypto platforms highlighted that around 15 million people have invested in these and whose collective money totals to around 600 crore ruppees. The MPs also echoed such concerns and emphasized a middle pathway to be brought up to suit investors’ interests too.
Well, dear readers, this is yet to be seen, as to what would take place next on the crypto horizon.