In addition to banning private cryptocurrencies, there are indications that the government itself may launch a digital currency. The central bank of India is also considering launching a digital version of the rupee. It will be called Central Bank Digital Currency. However, legal reforms will be needed to make it a reality.
The website of the lower house of parliament has given an idea about the proposed bill. It said the central bank had taken the initiative to enact a law to create a simple framework for the creation of government digital currency.
Cryptocurrency is called ‘convertible virtual currency.’ I.e. exchangeable virtual currency. However, no virtual currency can be used instead of the conventional currency. There is no one to control cryptocurrency in the same way that a common currency is controlled by a central bank. Anyone using the Internet can create cryptocurrencies. It can also transact. Authorities consider it dangerous because there is no control.
Cryptocurrency transactions are taxed in the United States. But in many countries it is not taxed. That coin cannot be seen in reality. It only exists online.
The most popular cryptocurrency in the world is Bitcoin. It has convertible value. That value has grown at a record rate in the last few months. Bitcoin was introduced in 2009 after the housing market collapsed. All its transactions are from open source ledger. Bitcoin can be converted to US dollars.
Recently, billionaire Elon Musk has argued in favor of Bitcoin. Then Indian investors became quite interested in it.
The Official Digital Currency Bill 2021 is scheduled to be introduced in this year's budget session of India. Its purpose is to help launch official digital currencies and to ban all forms of private cryptocurrency. However, the new bill will provide exemptions in some cases. Because the government wants cryptocurrency technology to be used more.
On January 25, India's central bank said the government was concerned about cryptocurrencies. The way that virtual currency is being used has a lot to worry about. At the same time, the government itself is trying to introduce digitized currency. The Reserve Bank is also looking into how to launch a digitized currency market. Earlier, the European Central Bank said there were concerns over the growing use of cryptocurrencies.
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