Since last week, several cryptocurrencies have plummeted to new lows. The sudden drop resulted from China’s announcement that it would ban cryptocurrency and its trade in any form in the country, sending shockwaves through the community. The Indian cryptocurrency industry was not exempt from this crackdown.
The value of Bitcoin and Ethereum plummeted, resulting in a flood of sales. With millions of investors seeking to sell and exit, WazirX, India’s largest crypto exchange, crashed. Aside from that, the Indian cryptocurrency industry had been expecting the government’s regulatory bill. According to the bill, all private digital currencies will be banned, and the Central Bank Digital Currency will be introduced as its own official currency (CBDC).
The bill was reportedly backed by the RBI, and it included plans to make disclosure of crypto holdings mandatory. However, the Bill was delayed, and it was drafted in accordance with the Subhash Garg Committee’s recommendations beginning in 2019.
According to a recent report in the Economic Times, India’s central government is considering forming a new panel of experts to investigate the possibility of controlling digital currencies in the nation. The committee is reportedly going to concentrate on blockchain and recommend it for technological advancements.
The government’s decision to bring in a fresh viewpoint from experts on digital currencies and their trading can be interpreted as a hint about the new council. One of the panel’s main goals will be to regulate cryptocurrency as digital assets rather than currencies. The new committee will go through the previous committee’s recommendations again, as well as look into the RBI’s new plan for an Indian digital currency. Another big change to look forward to is the committee’s emphasis on blockchain.
Many startups have been thwarted by blockchain technology in recent years. Various industries applaud the technology’s ability to have a safe and immutable infrastructure. Blockchain has been adopted by many financial institutions as a way to increase transaction transparency. In this case, the new committee will be able to find better ways to improve the use of blockchain with minimal effort and will be able to find more adaptable ways to improve the use of blockchain.
According to reports, India has nearly 15 million crypto users and adopters, and the country’s largest cryptocurrency exchange, WazirX, recently set a new trading volume record of USD2.3 billion. The new guidelines would be critical for a country with such a large number of crypto investors.
The Indian crypto market was shaken by news that the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, might result in a legal ban on the industry. Finance Minister Nirmala Sitharaman and Minister of State for Finance and Corporate Affairs Anurag Thakur, however, have stated that the state will evaluate the crypto industry carefully and will not impose a ban. The traders were relieved by the announcement. Even so, there was a looming fear of strict crypto constraints, and this new knowledge should have placed traders and exchanges at ease.