Cryptocurrencies Crash as Govt of India Prepares to Ban Private Players

Gitumani  |  Nov 24, 2021

All major cryptocurrencies report a fall in price by over 15%. The fall was recorded after govt manifested to propose a bill to ban private players in India. Bitcoin seems to be the worst hit as it went down nearly 18.53 %.

Cryptocurrencies Crash as India Preps to Ban Private Players 

The Centre's proposal to lodge a Bill on cryptocurrency on November 29, 2021, is aimed at enabling the formation of an official digital currency by the Reserve Bank of India (RBI). The bill aspires to the prohibition of all cryptocurrencies (except some) to launch a system to regulate crypto transactions in India. Nevertheless, this proposal on behalf of the government is seen as a major reason behind the decline in the value of major digital currencies. Bitcoin and Tether suffered the most among the crypto assets.

The Indian Government aspires to table the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. This is to be executed during the winter session of Parliament. The main aim here is to regulate the cryptocurrency framework in India.

An Overview of recent happenings 

  • The RBI is expected to instigate an official form of cryptocurrency. All the significant & private cryptocurrencies will be banned in India; provided the bill passes with its original terms.
  • Following the news of the ban going live, major cryptocurrencies witnessed a significant fall in value. Bitcoin fell by 18.53% whereas Tether reports falling by 18.29%. Also, Ethereum's value subsides by 15.58% on Tuesday. On Wednesday, the majority of cryptocurrencies were in the red.
  • Since 2017, the RBI has been vocalizing its affairs about cryptocurrencies. A pamphlet released by RBI on April 6, 2018, forbids banks and entities from servicing concerning virtual currencies.
  • At an event held recently, RBI Governor Shaktikanta Das acclaimed, "There is still an absence of serious and well-informed discussions over cryptocurrencies in public space."
  • The new bill tries to make a facilitative structure for the creation of official digital currency under the purview of the Reserve Bank of India. It also aims in prohibiting all private cryptocurrencies bearing few exceptions for promoting blockchain technology.

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