The uncertainty around cryptocurrencies is steeping up in India faster than ever. As the government looks to enforce a law regarding the prohibition of using cryptocurrency and bitcoin, anyone found guilty of trading such digital assets will be considered a punishable offense under the law. Is this step even relevant when other priority matters hang around pledging a resolute solution?
The proposal of a fine is ridiculous while keeping in mind the regulations that are broken every single day under the current economic scenario. It goes unnoticed due to the negligence of the government of India. The government is proposing a new bill where all sorts of digital money will prohibit. It will impact Bitcoin, Dogecoin, and other crypto money investors. The new bill proposes to criminalize possession, issuance, mining, trading, and transferring of crypto-assets. How will it affect the speculative trading of the stock markets?
If the new bill gets enacted into law, the investors will be left stranded and will raise concern among the bureaucrats across the nation. India will become the first country that does not conspire with Cryptocurrency and declares it an illegal activity across the stock markets. India being such an instrumental force among the global economies of the world, needs to procure its investments in such digital assets to reform the stagnant economic activities. Even China, which previously had banned the trading of mining activities, does not penalize any possession from the traders.
Although later today, the government resorts to allow Blockchain technology to prevail in India. Has it become a trend for the government to enforce a law, and then after review, amending it all over again. Cryptocurrencies generally are a form of digital assets traded in the stock markets in dollars. Generally, these digital assets come under the consideration of speculative trading.
“My view on this is that, of course, the Supreme Court has commented on cryptocurrency and while the RBI may take a call on official cryptocurrency, from our side, we are very clear that we are not shutting off all options,” said FM Sitharaman, referring to the proposal of the new law.
WHAT IS THE CONSCIENCE OF THE FINANCIAL MINISTRY OF INDIA BEHIND THIS WHOLE SCENARIO?
The Finance Ministry re-emerged with a statement regarding the cryptocurrencies that it takes a calibrated position; in the markets. The officials said that investors would have a six-month window to liquidate their assets before penalty levies on the investors. The report came just after the Financial Minister of India, Nirmala Sitharaman, commented about the issues prevailing in Crypto-currency. FM insisted that the Government is reviewing a new set of experiments that can revolutionize the working of Crypto-currency in India.
The Financial Ministry of India disregarded the closure of the digital assets and insisted that the financial markets are launching the new bill just for the sake of exploring new alternatives of bitcoin. Various senior bureaucrats, who possess detailed knowledge of such digital assets, examined the pros and cons of trading in bitcoin and cryptocurrency across various forms, including trading, holding, and mining. Following that, the officials concluded that it is better to withdraw investments in such kinds of digital assets as it could prove to be harmful in the foreseeable future.
From our side, we are very clear that we are not shutting all options. We will allow windows to people to do experiments on the blockchain, bitcoins, or Cryptocurrency, Sitharaman had said at an India Today conclave. We all know that the past experiences of India have been quite detaining, and this statement is only communicated to raise the hope of the investors, except anything else. The government is asserting that a cabinet note will detail kinds of formulations recurring under the window, as FM further stated that the note will release as soon as it is ready for dispatch.
She claimed that the center is not planning to shut out all the activities in one window, and more opportunities will get provided to the investors for reaping hefty amounts of rewards. But the question of concern is that with the implementation of the law. Is the window ever going to occur for the investors, or is it another false claim from the Government?
WHAT IS THE SYNOPSIS OF TRADING IN CRYPTOCURRENCIES ACROSS THE WORLD?
All forms of digital assets or cryptocurrencies are obtained either by consideration of goods or services or by mining activities. Mining is a perpetual activity through which a miner uses his computer prowess to crack computational puzzles. As a reward for cracking out the puzzles, the miners will acquire new bitcoins and is known as the theory of the creation of bitcoin or mining.
Lately, various stories revolved around the authentication of bitcoin and Cryptocurrency in India. But as stated earlier, that bitcoin has neither been authorized nor been regulated as a medium of payment by the central authority in India. Given the financial background, there has been no response from the Government concerning any sort of ban on Bitcoin as they are an independent payment method that comes with its set of risks and rewards.
WHAT COULD BE THE IMPLICATIONS IN THE FINANCIAL SYSTEM IF THE LAW GETS ENFORCED?
The Finance Ministry despite saying that there would be certain windows available for trading of blockchain, does not look likely that any such thing will happen. The markets’ position is volatile, and the withdrawal from Crypto-currency will hugely affect the investors’ liquidity as a majority of them invest large chunks of funds on digital assets.
The people among the financial fraternity remain hopeful that the government will not impose the ban on the whole dimension of Crypto-currency and barely regulate the trade constantly. If we evaluate the figures across various countries, India attains a higher potency in Crypto-currency. Over 7 million people in India are believed to have invested more than $1 billion of their funds and might be looking for some positive signs from the financial sector.
They are seeking help from the officials so that they get reimbursed just in case if the new law gets amended in the coming months. The officials at the financial departments announced that the vision is to ban the crypto assets so that the demand for blockchain technology surges up in Indian markets. The acceptance of bitcoin payments increased in India since Elon Musk came out in support of the platform on his social media.
The formulation by the Cabinet will assist the new norms of the law, according to that the investors will change their approach in the stock markets; What’s the next step for the investors now, should they withdraw their savings from Cryptocurrency and invest in mutual funds or wait for the next announcement by the Government.
Is it the right time to revocate the claim? Circulate all the facts and figures, and you’ll find no clue why the government alleges such a proposal at a time when Bitcoin surged up to a record high of $60,000. The government is once again letting the investors’ hope down, and even though it wants to amend new rules in Cryptocurrency, this is not the advert issue to discuss now.
THE FINAL OUTLOOK OF THE PROPOSAL
The proposed law will have severe implications on the financing network of India. Financial Ministry speaking in an interview with the conclave, gave an overview on the future of crypto-currency. But what does it hold for the investors in the stock markets?
Despite the economic slowdown, the Government is frequently amending contentious laws. It has not impacted the lives of the investors but has not provided any relief as was subdue. A large proportion of money invests in digital assets as it possesses a higher return on investment. The government could avoid the implementation of such controversial laws in the wake of the pandemic. At such a sensitive moment, the authorities show no contingencies to look forward to the finances of living a substantial life. While all this is concerning, the decisions of the leaders under the government need a strict review.