Amid the chaos in the crypto world in India in the past two days, Finance Secretary TV Somanathan has said cryptocurrency won't be a legal tender in India, just like gold, silver and alcohol, and that the issue is "off the cards".
Notably, his statement comes two days after the development that the government will bring in the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in the Winter Session of Parliament starting November 29.
The bill aims to ban all but a few "private cryptocurrencies" while allowing an official digital currency by the RBI. This decision is driven by concerns of cryptos being allegedly used for duping investors and for terror funding. This bill also aims to create a framework for the creation of official digital currency to be issued by the Reserve Bank of India (RBI).
Somanathan has indicated that some people are overreacting to the development of the crypto bill being scheduled for listing in Parliament. "However, one thing I can say very clearly is that crypto will not be legal tender by any means. Gold is not a legal tender, silver is not a legal tender and alcohol is also not a legal tender, beyond that I will not be in a position to say anything more," he told CNBC TV18.
Notably, ever since the news reports regarding the new crypto bill broke, investors resorted to heavy selling, resulting in up to 15 per cent fall in the prices of some of the popular cryptos like Bitcoin and Ethereum.
As per the contents of the Cryptocurrency and Regulation bill, it aims "to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses." It also said the bill will also allow a framework for "the creation of the official digital currency to be issued by the Reserve Bank of India".
The full content of the bill is not in the public domain, but experts believe that the government may put a ban on private cryptocurrencies only. Though all cryptocurrencies are private in nature, as there is no single body controlling them, the terms "private" and "public" refer to the level of privacy the cryptocurrencies provide.
Meanwhile, the world's largest cryptocurrency Bitcoin was trading marginally higher today. The price of Bitcoin rose 2.3 per cent to $57,800 on WazirX. The market cap of the cryptocurrency stood at over $1,078 billion. Currently, the global crypto market cap stands at over $2.58 trillion, a gain of 0.44 per cent. Other cryptocurrencies were trading on a mixed note today.
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