Reserve Bank of India to Discuss Banning Private Digital Currency Trades

Centralized banking institutions have recognized the potential of blockchain technology and digital currencies. However, digital currencies created legal loopholes and gray areas that left financial regulators scurrying to rectify the problems. Third-party regulators have pushed forward several attempts to gain control of blockchain’s decentralized exchange platform. The Reserve Bank of India is scheduled to propose banning private cryptocurrency use during its upcoming budget session.

India’s lower parliament house will meet in New Delhi to discuss its financial future. Digital currencies have already been embraced into national economies in places like China, but the crypto market’s volatility hindered future advancements in other countries. India’s government has previously considered banning cryptocurrency use entirely, but the potential benefits of a universal Indian digital currency couldn’t go ignored. The Reserve Bank of India is scheduled to discuss the Cryptocurrency and Regulation of the Official Digital Currency Bill of 2021.

Introducing New Legislation for Digital Currencies

The Reserve Bank of India will review newly proposed legislation to ban private cryptocurrencies. The new proposal leaves room for special exemptions that prove they effectively boost blockchain tech advancements and crypto use. The particular exemptions for private digital currencies would come with strict eligibility criteria but wouldn’t eliminate private crypto trades. India has previously swayed which direction the country would take to address cryptocurrency trading and integration.

The Reserve Bank of India has also discussed implementing an eighteen percent sales tax for Bitcoin transactions. If the eighteen percent digital currency sales tax gains India’s lower parliament’s approval, the country could generate more than one billion dollars in potential revenue. India’s government continues discussions regarding which digital currencies might be banned in the future. Private digital currencies could take a massive financial hit if India’s reigning officials enforce third-party regulations.

Will There be a Digital Rupee?

In 2020, China made history by launching the Central Bank Digital Currency, making the digital Yuan the first of its kind. The digital Yuan has experienced substantial success, which pushed the Chinese government to expand its use on a broad scale. By 2022, Chinese officials hope to expand the digital Yuan’s usage across the nation. Several crypto analysts believe the COVID-19 pandemic paved the way for blockchain’s recent integration into centralized banking platforms.

India seemingly plans to follow China’s footsteps by releasing the digital Rupee. It isn’t clear whether India will start a digital Rupee system anytime soon, but India’s Reserve Bank is toying with the idea. Recently, India has considered introducing blockchain-powered voting systems for elections. Private digital currencies will likely be banned after the parliament explores budgeting sessions.

Exploring Ways to Implement Digital Versions of Fiat Currencies

The Reserve Bank of India has expressed concerns about implementing digital versions of fiat currency. With China’s Central Bank Digital Currency experience significant success, India’s official will likely soon jump on board the crypto train. India’s newly proposed legislation would not just ban Bitcoin transactions, but the ban would also halt private digital currency trading.

India’s lower parliament began a session on January 29th, but the debates will in New Delhi until officials reach an agreement. Indian crypto traders fear losing valuable Bitcoin investments if the Reserve Bank approves the proposed legislation banning private digital currencies. Until India officially halts Bitcoin and private crypto trading, users can openly use digital currencies for any transaction without facing additional taxation.