After a new cryptocurrency bill appeared on the scene in India’s legislative system last week, the bill is apparently on a “fast track” to be considered for passage into law. The bill, called the “Cryptocurrency and Regulation of Official Digital Currency Bill 2021,” has been a matter of concern for crypto users in India: reportedly, the bill could ban “private cryptocurrencies” and enforce the development of a “digital rupee.”
According to a Friday report by CNBC-TV18, “the government may take the ordinance route to pass the Cryptocurrency and Regulation of Official Digital Currency Bill.”
The “ordinance route” in India seems to be somewhat similar to an executive order in the United States–both practices involve quick legislation that comes from the executive branch of the government. When a bill goes through the “ordinance route,” it is put into effect by the president of India at the recommendation of the Union Cabinet. However, ordinances can only be issued when the Indian Parliament is not in session.
Indeed, “they want this bill to be cleared as soon as possible,” said reporter Timsy Jaipuria, citing unnamed sources. “The cabinet is understood to have given clearance to this particular proposal that this bill can be introduced via an ordinance route in its last meeting which was held on February 3rd.”
“The PMO, Finance Ministry, and Cabinet Secretariat have started preparing the draft details of the ordinance. The government is of the firm view that they want to introduce the law within a month of clearance of the ordinance.”
”All eyes are on India to find out if we’re for or against innovation.”
However, there’s still much to be determined about the bill–in fact, according to Bitcoin.com, very little is known about the bill’s contents; it hasn’t been made public yet. However, reports have said that if passed into law, the bill could have a highly restrictive effect on the crypto industry in India.
Nischal Shetty, crypto activist and founder of the WazirX exchange, has been encouraging members of India’s crypto community on Twitter to contact their MPs about the bill every day since it appeared. Nischal has also been at the forefront of the #IndiaWantsBitcoin campaign for 831 days.
— Nischal (WazirX) ⚡️ (@NischalShetty) February 5, 2021
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In partnership with several other exchanges in India, WazirX has also launched the exchanges have launched websites – indiawantscrypto.net and indiawantsbitcoin.org–that crypto users can use to send messages to their representatives in parliament.
On Friday, Nischal told CoinDesk that “Within one day, over 10,000 emails have been sent via indiawantscrypto.net from all parts of the country.”
“It’s a critical moment, and all eyes are on India to find out if we’re for or against innovation.”
“If the law were to stand and be successfully enforced, then it could significantly hamper innovation in India.”
And indeed, while the future of the bill is unclear, many in the industry are hoping that it won’t be passed into law. Garrick Hileman, Head of Research for Blockchain.com. told Finance Magnates that “if the law were to stand and be successfully enforced, then it could significantly hamper innovation in India. And not just blockchain tech innovation: many entrepreneurs in other highly disruptive areas of technology may think twice before launching their startups in India and prefer to move to more innovation-friendly environments, like California and the UK.”
“India has the potential to be a leader in crypto and blockchain technology innovation,” Hileman said. Whether or not you support cryptocurrencies like bitcoin and ethereum, the next generation of financial infrastructure will leverage decentralized finance (DeFi). India is in general very pro-innovation and has some of the most talented entrepreneurs and engineers in the world. In my view, India could become one of the most important financial innovation hubs in the world.
Therefore, “my hope is that Indian policymakers will recognize how counterproductive this legislation is and withdraw it. Such bans have been contemplated in the past in India, and even attempted in various other countries. Proposed bans have typically either been scuttled before implementation or largely unenforced.”
There are multiple reasons behind why proposed bans are ultimately dropped or not maintained over time. Perhaps the most significant reason is that many countries come to understand they are actually much better off embracing crypto rather than trying to drive crypto, and the innovative entrepreneurs working on the future of finance, into offshore markets that capture all the gains.”