The worst fears of Indian investors in the crypto market are slowly but surely turning into reality. Recently, the Indian government released a bulletin, which stated that the Cryptocurrency and Regulation of Official Digital Currency Bill is set to ban all private cryptocurrencies. The bill is slated to be introduced in the Parliament’s winter session.
Apart from banning private cryptocurrencies, the bill will also aim to create a framework for the country’s official digital currency, which the Reserve Bank of India (RBI) will issue. This latest development doesn’t come as a surprise because, in January 2021, an earlier draft of the bill was submitted.
However, hopes were high among crypto advocates that by the time the bill was finalized, the government’s stance would soften. After all, Indian investments in the global crypto market have skyrocketed in recent years.
The immediate effect
After the bill was announced, the crypto market experienced a crash. On the Indian crypto exchange WazirX, meme coins Dogecoin and Shiba Inu fell by over 15%, while Bitcoin, the world’s largest crypto, fell by over 13%. However, according to crypto experts, this is only a temporary dip in crypto prices.
Experts have pointed to China’s crackdown on cryptos earlier this year, when the crypto market experienced a similar crash. However, the market eventually recovered. Experts are predicting that something similar is on the cards after the announcement from the Indian government.
According to an Indian news publication, the government is set to permit crypto trading on exchanges that comply with certain rules and regulations.