Cryptocurrency a form of digitalized currency or electronic ledger to be more accurate which was introduced as Bitcoin in 2009 and is now on the verge to get banned in India due to many reasons. The concept of Cryptocurrency is volatile and hence it was still a new concept for the major part of the world to just shift to a digitalized currency who no one holds accountable for.
Bitcoin is been under surge for a while now and its profitability and accessibility is relative. For example Bitcoin since December 2017 has seen a downfall of 4X. But despite the surge of Bitcoin as much as $5.2K Cryptocurrency has given some plausible returns on investments as compared to the returns in commodities like oil and gold from the when compared to past years.
Cryptocurrency Should be Banned – IEPF
The Investor Education and Protection Fund (IEPF) Authority, under the ministry of corporate affairs, has taken the job of protecting the interest of investors. In their latest statement in Moneycontrol, they have openly given a statement about favouring the ban of Cryptocurrency. According to Anurag Agarwal, IEPF CEO “Cryptocurrencies are like Ponzi schemes and must be banned. When it comes to investor protection, the IEPF has to take a stand against certain things. Against Ponzi schemes, we are taking a stand,”
Not only IEPF but The Finance Ministry also sees Cryptocurrency as a threat. In December a statement from the Finance Ministry was released which read “The price of Bitcoin and other cryptocurrencies (virtual currencies) is entirely a matter of mere speculation resulting in spurt and volatility in their prices. There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money.”
India Introducing Bill to Ban Cryptocurrency
Now Indian government seems keen on the Ban of Cryptocurrency in its entirety. A committee has been formed to take all the necessary consultations on a bill called “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019”. According to the government, there has been a hostile approach towards Cryptocurrency and hence there is an urgent need to ban this digital currency.
Earlier in this year, Supreme Court had already given directions to the government and a time period of four weeks to come up with a plan in order to ban Cryptocurrency. According to the Economic Times, the bill is now being circulated in the appropriate government to discuss and come up with a sorted plan.
The bill is being taken seriously as there are millions at state. Over four Ministry including the Finance Secretary, Subhash Chandra Garg, the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPF) are working together on the preparation of the bill discussion various matters over it.
Previously there had been speculations that the government could ban Cryptocurrency under the Prevention of Money Laundering Act (PMLA), also there were speculations that the government is looking up to bring in policies in order to regulate the digital currency and is planning to set up a committee regarding the same.
Recently the Economic Times reported that “The ministry of corporate affairs has in its feedback to the department of economic affairs pointed out the sale purchase and issuance of cryptocurrencies such as Bitcoin, Etherium & Cashcoin, etc. are being done by individuals and companies on false inducements of massive returns. Such schemes are neither transparent nor do they fall within any regulated legal framework. Many of them are run as Ponzi schemes, it said adding that these schemes were being used to defraud gullible investors”
RBI in their statement said that Bitcoin and Cryptocurrency are nothing but a sham. The entities which are regulated by it cannot provide service to any individual or business dealing or settling with virtual currencies. It is clear to see that Indian government while looking at the far future plans to safeguard their investors from this worldwide web of Cryptocurrency and hence plans on bringing about a Ban on Cryptocurrency. While many countries are still taking huge advantage of this digitalized money, the constant surge in Bitcoin shows that its future is near.