Countries like the US, China, Japan, Switzerland, South Korea and South Africa have embraced cryptocurrency, while uncertainty looms in India. After facing a ban on cryptocurrency transactions once, crypto investors and other stakeholders are skeptical about their future as the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is scheduled to be presented in the current Budget session of Parliament.
With Bitcoin crossing the $50,000 level after sustained demand from institutions like Tesla, MasterCard, Paypal, Microstrategy etc, cryptocurrency players are hopeful that the government won’t put a blanket ban.
Referring to acceptance of Bitcoin and other crypto currencies like Ethereum, Doge etc, Nischal Shetty, CEO, WazirX, said, “Institutional participation is also very low in India in crypto and regulatory uncertainty is the biggest hurdle in that. Institutional players would need regulatory clarity before participating in a new asset class like crypto. Introduction of a regulatory framework will certainly help cryptocurrencies thrive in India.”
Earlier, the Reserve Bank of India (RBI) had banned the cryptocurrencies in India as there is no regulation. Although the Indian Rupee (INR) can only be used as a currency in India, cryptocurrencies are used more like digital assets.
Unlike other currencies, cryptocurrencies may also be traded, resulting in huge fluctuations in their values.
As a result, there is no stability in the value of cryptocurrencies, while stability is one of the parameters that determines the quality of a currency.
However, in a cryptocurrency blockchain, only the respective cryptocurrency – like Bitcoin, Ethereum etc – may be used and not the other traditional currencies.
To avail the benefits of cryptocurrencies, what is needed is a regulation framework to safeguard the interests of crypto investors.
“A right crypto regulation will push India ahead, while a ban on Crypto will set our country back by a decade,” Shetty said.
However, it’s up to the government to decide whether to put a regulatory framework in place or put an outright ban on cryptocurrencies.