Crypto experts divided on implications of India’s ‘private crypto’ ban
Amid the surprising crypto ban in India, government documents from the year 2019 has been used by an Indian crypto experts for citing that a proposed ban on all “private cryptocurrencies” had been underway for every crypto.
On November 24, the Indian government announced that it would very soon introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in its Winter Session commencing November 29.
The upcoming crypto bill seeks a legislative vote for creating an official digital currency while simultaneously imposing a ban on “all private cryptocurrencies.”
However, there seems to be on the ground a lot of confusion regarding the exact meaning of a “private cryptocurrency,” as some users speculate it could refer to “privacy” coins like Monero or Zcash.
Naimish Sanghvi, who is the Founder of the crypto news website CoinCrunch India, had explained in an interview on November 25 at India Upfront that by the Indian government’s definition, private crypto could mean every cryptocurrency there is.
Sanghvi said that in 2019, the Department of Economic Affairs had prepared a report on cryptocurrency, indicating that essentially “everything that is non-sovereign” comes under the designation of a “private cryptocurrency.”
Sanghvi continued that by that logic, “Bitcoin and Ethereum will come into that definition.” He also added that anything that is hence issued by the government becomes “public”, and likewise, everything that is issued by private players is “public.”
The 2019 report had also recommended that all private cryptocurrencies, except any cryptocurrency that is officially issued by the government, “would be banned in India.”
The 2019 report had stated that all the cryptocurrencies have mostly been created by “non-sovereigns”, and in that sense, they are all “entirely private enterprises.”
Rohit Kundliwal, Marketing Manager at major Indian crypto exchange WazirX, has urged crypto enthusiasts for calm and has downplayed the panic surrounding an outright ban.
Kundliwal had pointed in a LinkedIn post yesterday that crypto cannot be banned, but “only regulated” since, for now, there is “no clarity” on what characteristics constitute a private cryptocurrency.
Kundliwal had also said that Narendra Modi, Nirmala Sitaraman, Finance Ministry and many prominent, “sane politicians” have resonated multiple times that there won’t be a blanket ban on crypto.
Indian MP from Shiv Sena, Priyanka Vickram Chaturvedi, had also said in a November 24 interview speaking with India Today that the government’s proposed ban on crypto in India is a “move backwards and a little too late.”
Chaturvedi had said that banning private cryptocurrencies is actually “ending the entire idea of a new fintech” that has the potentials to emerge as “a huge employment and generator” for India’s new economy.
She had added that the government must “facilitate an environment” that is both “evolving and thriving,” instead of a ban with the impacts of “killing this entire space.”
The crypto market in India has also reacted dramatically to the news of an incoming blanket ban, as prices on WazirX plummeted heavily on November 24 morning at 3:30 am UTC while crypto traders scrambled to sell their holdings.
The panic selling event had also tanked the price of Bitcoin, Ether and Cardano (ADA) in double-digit local price depreciation.
On November 18, India’s Prime Minister Narendra Modi had called on all democratic nations to come together and work for regulating the cryptocurrency, specifically Bitcoin, so that they can ensure it “does not end up in the wrong hands,” or it would “spoil our youth.”
