New Delhi, Business Desk. India is considering a proposal to treat cryptocurrencies as a financial asset while protecting small investors. According to officials involved in finalizing the cryptocurrency bill, the government of Prime Minister Narendra Modi wants to introduce this bill in Parliament in the session beginning on November 29. The bill may legally stipulate a minimum amount for investment in digital currencies. Whereas their use as a legal tender may be banned. However, no final decision has been taken yet.
According to a Bloomberg report, the Cryptocurrency Bill (The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021) talks about banning private cryptocurrency. Meanwhile, former RBI governor Raghuram Rajan has claimed that the chit fund-like cryptocurrency bubble will burst soon. Most of these will cease to exist. There are currently around 6,000 cryptocurrencies in the world, and Rajan says only 1 or two of these will remain.
chit fund problem
Rajan said in a TV interview that most cryptocurrencies exist only because some idiot wants to buy them. He said that cryptocurrencies will cause the same problems in the country as chit funds have caused. Chit funds take money from people and then disappear. Many people holding crypto assets will face trouble in the coming days.
No permanent value of crypto
Rajan said that most cryptos have no permanent value, but some cryptos may exist for payments, especially cross-border payments. Regarding maintaining the blockchain technology, Rajan said that the central government should allow it to be carried forward in the country. The government has said that blockchain technology can be allowed.
The government is planning to introduce a bill in the winter session of Parliament to ban private cryptocurrencies like Bitcoin. This will also clear the way for official digital currency in the country. RBI will issue it. RBI has warned the government of the dangers of private cryptocurrencies. Governor Shaktikanta Das called cryptocurrencies a threat to macroeconomic and financial stability. (with pti input)