Thoughts on the proposed cryptocurrency bill
It has been an exciting week for the cryptocurrency ecosystem with support pouring in from popular personalities like Elon Musk, Ray Dalio and many more. Post Elon Musk’s tweet on 29th Jan., Bitcoin prices increased by 14% and peaked at US$38,300 during the day. Meanwhile, Ethereum has reached its all-time high of US$1,690 and continues to give amazing returns of +380% in the last 3 months. MicroStrategy, the publicly traded Business Intelligence company invests another $10million in BTC (2.7 Billion Till date) and Visa, once enemy of Bitcoin has announced plans to help banks in providing Crypto trading services.
Cut to the Indian story……..
Panic, disappointment and uncertainty of the future of hard-earned crypto investments. These have been the sentiments among Indian crypto traders since last week. The news of a bill to ban private cryptocurrencies has dampened the spirits of Indian crypto community. Panic drove many investors to liquidate their assets at a 10% discount compared to International prices.
There has been no information regarding the contents of the bill or the regulation that the government is planning to bring in. It is imperative that we hold our horses till any further information is out regarding the bill to safeguard investments. We thought of listing down all possible scenarios, so that customers can make quick decisions when there is more clarity about the proposed bill.
The growing crypto community in India is eagerly awaiting a green signal from the regulatory body to make a mark in this future tech and make India a strong competitor in this field. Innovations can happen first in India with the help of regulatory clarity in this industry.
OUR REQUEST TO THE POLICY MAKERS
Our Finance minister, in her recent budget, allocated ₹1,500 crore to push digital transactions. Cryptocurrencies can be the backbone of India’s future digital growth story and can be an enabler in achieving our digitization goals.
We appreciate the Government’s intent in backing blockchain technology as well as the introduction of a Central Bank Digital Currency (CBDC) backed by the Government. While CBDC will definitely be a game changer, it cannot replace or incorporate all the use cases that different cryptocurrencies are trying to solve. The analogy is that of an open-source Android being banned & expected to be replaced by Apple iOS or Microsoft’s Windows. Given that each have their own uses and strengths, they should ideally co-exist for the benefit of the populace.
Though cryptocurrencies are banned in China, it still has one of the largest crypto miner bases in the world. It is difficult to implement a ban on a technology that is internet enabled and peer-to-peer connected. Limiting adoption is the best-case scenario the Government can achieve by banning cryptocurrencies. When most of the developed nations are finding ways to regulate this space and make a foothold in this growing technology, why as a nation should we be left behind?
With kind regards,
Team Giottus and the Indian Crypto Ecosystem