As the Cryptocurrency Bill seeks to prohibit all private cryptos in India with certain exceptions to promote the underlying technology, there has been a debate on what constitutes “private cryptocurrencies” in the country. Given the details of the Bill are not yet known it has been left open to many interpretations creating a stir in the crypto world. While few say that it can mean that all tokens other than Central Bank Digital Currency or CBDC will be banned others say it can mean all cryptos that do not have a public ledger to track transactions can be banned.
According to experts, public cryptos are those which run on public blockchains with publicly available verifiable transaction history on the blockchain ledger. In case of public blockchain anyone with the transaction hash can verify whether the transaction was validly done or not and, being decentralized, the transaction is immutable and irreversible.
“Private blockchain are those whose transaction history may not be publicly available on blockchain ledger while they are still decentralised but within a close ecosystem. However, historically India in proposed bill in Feb 2021 has treated "private cryptos" as anything which is not issued by the government as CBDC. This definition apparently is a departure from the global definition of private cryptos and, thereby, is creating more stir in the Indian crypto ecosystem,” said Varun Sethi, a Blockchain lawyer.
Crypto exchanges are also at sea as the government has not yet clarified how they seeks to differentiate or categorise cryptocurrencies as public or private. “In the crypto ecosystem, private cryptocurrencies are ones that do not have a public ledger to track transactions. An example of such a currency is Monero. Such cryptos are banned in many countries. Bitcoin, Ethereum and other popular cryptos have a public ledger. If Indian Government defines private cryptocurrencies as one that is not issued by a central body, then most of the popular cryptocurrencies will fall under this ambit,” Vikram Subburaj-Co-Founder and CEO of Giottus Crytocurrency Exchange.
Avinash Shekhar, Co-CEO, ZebPay on the announcement of crypto bill being tabled in the parliament’s winter session said, “We’re awaiting further details on the bill that is going to be presented in the winter session of the Parliament. There have been many positive steps taken by the government to learn and understand crypto and its impact on all stakeholders- investors, exchanges, policymakers. So, we’re looking forward to a crypto bill that takes into consideration all the inputs from those discussions.”
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