In March 2020, the Supreme court of India quashed the restrictions imposed by the RBI (central bank of India) on cryptocurrencies.
On 29th Jan 2021, a new bill proposal for discussion was introduced in the parliament. It read as in the following
"The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 To create a facilitative framework for the 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 intent of the Indian government is to promote a single cryptocurrency that will be controlled by the Government whilst banning the rest of the cryptocurrencies that are available in the market. This bill if passed will make the restrictions legal or rather cryptocurrency illegal in India. The cryptocurrencies & trading crypto is already banned in India for several years now by the government, though the legality of the same is questionable. This has not deterred the crypto miners who continue to trade on international markets.
In the last few days, there seems to be some sort of urgency for the Indian government to sidestep parliament and pass the bill via the ordinance route which is similar to an executive order. The urgency seems to be stemmed from global turmoil on crypto markets which may be moving/impacting the fund flows outside India (GME etc ?).
Knowing the performance of the current Indian government all actions are tending towards the creation of the new digital currency in India.
What impact will this have on the rest of the globe? It is likely that India choosing the restrictive innovation route will be seen as a trendsetter for most other politicians in other countries to follow suit. This would have a direct impact on restrictive laws to be passed in other western countries. Additionally, it will restrict the current crypto market access to Indian funds. i.e. about 10 trillion PPP market that is ranked 3rd in the world.
It is advisable to watch out for Indian & US executive decisions expected in February that may heave some turmoil to the industry.
