Panic has engulfed the crypto startups in India following the government’s proposal to ban all the private cryptocurrencies in India. While those who are aware of this scenario are in a complete panic, others have no idea what’s happening.
So what does this new law means for India and what in the name of God is cryptocurrency? For all those of you who have no idea what’s going on, here we decode the ongoing situation in details.
So before we move on to know what is happening, we will give you a brief and easy explanation of what cryptocurrency is.
Understanding blockchain and cryptocurrency
If you have been in constant touch with the latest news, you must already have heard of blockchain technology. Although it may seem complicated, the core concept behind blockchains is quite simple.
In the simplest of terms, blockchain is a type of database which stores information in a chain of blocks. Every time a new data comes in, it enters the chain as a new block.
Cryptocurrency uses the technology of blockchain as a form of online payment in exchange for goods and services. The most famous cryptocurrencies available in the market right now are Bitcoin, Ethereum, Tether and many more.
There are many reasons for the popularity of cryptocurrencies. Tech magnates and other startups see cryptocurrency as the future currency and they want to invest in it now before it gets too late or too expensive.
Cryptocurrencies are indeed the future of transactions in a tech-driven world which is why the Indian government’s latest decision has put the crypto startups of India in a state of panic.
Indian Government’s Crypto Bill
The new crypto bill that government has proposed seeks to ban all the private cryptocurrencies. This will pave the path for RBI to introduce its own digital currency, a CBDC – Central Bank Digital Currency.
Although the fact that India seeks to have its own digital currency is quite good, it’s the fact that they want to ban all other private cryptocurrencies that has stirred protests.
Many companies have their own cryptocurrencies which we generally call tokens and all these tokens have their own specific purpose. Banning these cryptocurrencies will mean that certain trades can not be carried out because cryptocurrencies like Bitcoin or Ethereum needs their own blockchain in order to function.
Although RBI had previously banned banks from processing cryptocurrency payments back in 2018, Supreme Court of India had overturned this decision in March 2020.
Future of private cryptocurrencies
With this new crypto bill proposal, many Indians are wondering if they should sell their cryptocurrency. It’s pretty difficult to make this decision as of now because some exceptions will be there.
Moreover, the government can’t criminalise those who have already invested in cryptocurrency. Passing retrospective criminal laws are prohibited in India.
As of the future in cryptocurrencies, it will be a huge waste of potential growth for India if most of these public or private cryptocurrencies are banned. With the world catching up with cryptocurrency and blockchain, India needs to have freedom in this technology to stay in the game.
Until next time!