As India plans to introduce a new law to prohibit all 'private cryptocurrencies' in the country, the industry stakeholders have come out in unison, hoping that the government will listen to all the stakeholders before taking any decision.
Among the bills lined up for consideration during the Budget Session of Parliament is the 'Cryptocurrency and Regulation of Official Digital Currency Bill, 2021' that will create a facilitative framework for 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.
"Since the government is considering introducing the Bill during this session of Parliament, we are sure the government will definitely listen to all the stakeholders before taking any decision," said Sumit Gupta, co-founder and chief executive of CoinDCX, a cryptocurrency exchange in India.
"We are talking to other stakeholders and will definitely initiate deeper dialogue with the government and showcase how we can actually create a healthy ecosystem in unison," he said in a statement.
The Reserve Bank of India (RBI) is already exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalise it.
The RBI made the remarks in a booklet titled "Payment and Settlement Systems in India" released last week.
The apparent softening in RBI's stand on cryptocurrency came after the Supreme Court last year set aside a circular issued by the RBI that barred any entity from providing banking services to anyone dealing with virtual or cryptocurrencies.
The RBI in its booklet on payment systems noted that central banks around the world are examining whether they could leverage on technology and issue fiat money in digital form.
According to Kumar Gaurav, Founder and CEO, Cashaa, it is too early to comment on what exactly the term 'private cryptocurrency' refers to as per the new government draft.
"Further, understanding that cryptocurrency is a global and decentralised system, there is no way any government can ban it. That would require that kind of technology and control, which technically does not rest with anyone," Gaurav said.
"We are positive that the government will come up with regulations and policies that will put control on the scams and let the innovation in the industry, including the crypto like bitcoin, Cashaa, ethereum that are built on the public chain to grow and thrive," he added.
Rahul Pagidipati, CEO at ZebPay said that the digital currency Bill to be introduced before the Lok Sabha is a welcome step forward.
"Its success will depend on the details, particularly the definition of what the Bill calls 'private cryptocurrencies'. This is not a common term. Bitcoin is not privately owned by anyone. It is a public good, like the internet," Pagidipati said.
Bitcoin and most crypto assets are more like gold and not an alternative to government-issued legal tender.
"Crypto assets and digital government currency can coexist and together, they can bring tremendous benefits to the Indian economy," he noted.
With the overall value of all cryptocurrencies surpassing the $1 trillion mark and Bitcoin hovering over $33,000, industry experts have said that crypto may become the most important asset class of the 21st century and India needs to catch up fast with the global trend.