Key Takeaways
- Major cryptocurrencies dipped in the Indian market after Government announced plans to ban priate crytpocurrencies
- WRX, the native token of Indian crypto exchage WazirX dipped over 20%
- The Indian Government will deliberate on the bill in the upcoming Winter Session of the Parliament
YEREVAN (CoinChapter.com) – Prices of major cryptocurrencies crashed in India after news broke out about a proposed law that will prohibit all private cryptos in the country. WRX, the native token of popular cryptocurrency exchange WazirX took a massive hit, dropping over 20% against the Indian Rupee (INR). The huge drop comes as a result of panic selling by Indian investors. The anticipated crypto ban propelled a Fear, Uncertainty, and Doubt (FUD) phenomenon, causing a bloodbath in the Indian market.
However, WazirX (WRX) was not the only crypto to take a blow. All major cryptocurrencies took a tumble, causing the Government to receive a lot of flak from crypto supporters.
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Indian Parliament to take a call on cryptocurrency regulations
According to the official Parliament bulletin, the Indian Government will introduce a crypto bill in the Lower House of the Assembly in the upcoming winter session deliberations. The Finance Ministry will table “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” for introduction, consideration, and passion, according to the circular.
“To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,”
the bulletin reads.
While the bill will facilitate the creation of the digital Rupee by the Reserve Bank of India (RBI), the crackdown proposal has left people frowning.
However, some investors also pointed out that the Government only plans to ban private cryptocurrencies, indicating that most tokens will still be allowed.
This reassurance helped the markets recover slightly, preventing more blood on the charts. Others investors jumped at the opportunity to buy the dip, stocking up on assets at a discounted price.
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Cryptocurrencies find little opposition in Government circles
Earlier this month, representatives of the Indian crypto industry had met the Indian Parliamentary standing committee on finance. After deliberations, the participants had come to a consensus not to ban cryptocurrency in the country. The sides had also agreed that the sector has to be regulated to prevent misuse.
Ruling party BJP leader Jayant Sinha, who heads the parliamentary committee, had also come out in support of cryptocurrencies.
“It is very important to harness the force of this crypto technology and enable it for our domestic users in an appropriate, balanced way,”
he had argued.
The decision to table the crypto regulations bill comes as no surprise. Finance Minister Nirmala Sitharaman had announced earlier that her department was working on a new bill that would define the status of the ambiguous industry in the country.
Days before the Parliamentary commission’s meeting, Prime Minister Narendra Modi had also chaired a similar meeting about cryptocurrencies. The local media reporting on the meeting claimed Government’s stance viz a viz crypto to be “progressive and forward looking”.
Last week, the Indian PM Narendra Modi delivered the keynote address at the Sydney Dialogue. During his speech, he also touched on the growing cryptocurrency industry. Modi called on all democratic nations to work together to ensure cryptocurrency “does not end up in wrong hands.”
While the markets have reacted to the news, it is unlikely that the Indian Government will ban all cryptocurrencies. However, the bill is likely to pass before the Parliament meets for the Budget Session due in February.
