Experts divided on how far India’s private crypto ban will go
Previous reports of the Indian government indicate that it believes any cryptocurrencies not issued by the government are considered private and, hence, could be banned.
Government documentation from 2019 has been referred to by an Indian crypto expert to suggest that the proposed ban on all "private cryptocurrencies" could include just about every crypto
The Indian government this week announced it would introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 when it convenes at the Winter Session on Monday.
The Bill looks at a legislative vote on making an authority digital currency while imposing a ban on "all private cryptocurrencies." "private cryptocurrency," with some users speculating it could refer to "privacy" coins such as Monero(MXR) or Zcash(ZEC).
Naimish Sanghvi is the founder of crypto news website CoinCrunchIndia, he described in a Thursday interview session on India Upfront that by the government's definition, private crypto could mean just about every cryptocurrency there is stated
“In the 2019 Department of Economic Affairs report on cryptocurrency, they said that everything that is non-sovereign is designated as a private cryptocurrency.”
"And by that logic, it means that Bitcoin and Ethereum will come into that definition, he said, adding that" anything issued by the government is public and everything issued by private players in public.
The 2019 report in question suggested that "all private cryptocurrencies, except any cryptocurrency which might be issued by the government, be banned in India." is stated:
“All those cryptocurrencies have been created by non-sovereigns and are in this sense entirely private enterprises.”
Rohit Kundiwal, marketing manager at Indian crypto exchange WazirX, asked for calm and downplayed fears of an outright ban.
In a Linkedin post on Wednesday, Kundliwal pointed out that crypto can't be banned, just regulated, and that there is no Clarity on what constitutes a private cryptocurrency.
He added that "Shri Narendra Modi, Finance Ministry of India Nirmala Sitaraman and many prominent and sane politicians have told multiple times that there will not be a blanket ban on crypto."
In the meantime, Indian Shiv Sena Member of Parliament Priyanka Vickram Chaturvedi said in a Wednesday interview with India Today that the proposed ban is a "move reverse and a little too late." She said:
“Banning private cryptocurrencies is basically ending the entire idea of a new fintech that can emerge as a huge employment and generator for the new economy.”
She said that the Government must "facilitate an environment which is evolving and thriving. The effect of doing this...is that you are killing this entire space."
The market reacted dramatically to the news of a possible ban, with prices on WazirX plummeting on Wednesday morning at 3.30 AM UTC as users scrambled to sell their holding. The panic selling event tanked the price of Bitcoin (BTC), Ether(ETH), and Cardano (ADA) in double-digit local price depreciation.
On Nov 18, Indian Prime Minister Narendra Modi called on all democratic nations to work together to regulate cryptocurrency, specifically Bitcoin, to "ensure it does not end up in the wrong hands which can spill out youth."