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cryptocurrency | IST

Cryptocurrency bill: Law makers don't want competition with INR, say experts

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Central government has lined up the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for the winter session. The bill aims to create a facilitative framework for RBI's official digital currency, while seeking to prohibit private cryptocurrencies in the country barring a few exceptions. CNBC-TV18 caught up with Tanvi Ratna, Founder and CEO, Policy 4.0, Sidharth Sogani, Founder and CEO of CREBACO Global, and Nischal Shetty, Founder and CEO of WazirX, to understand what that truly means and what would be its implications.

Central government has lined up the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for the winter session. The bill aims to create a facilitative framework for RBI's official digital currency, while seeking to prohibit private cryptocurrencies in the country barring a few exceptions. These exceptions are aimed towards promoting the underlying technology and its uses. The details about the exceptions, however, are yet to be known.
To understand what these exceptions could be, CNBC-TV18 spoke with Tanvi Ratna, Founder and CEO, Policy 4.0, Sidharth Sogani, Founder and CEO of CREBACO Global, and Nischal Shetty, Founder and CEO of WazirX.
Sogani said, “The news came in last night. It is mostly similar to the February 2021 circular which came in from the Lok Sabha. So, I don't see this has anything to panic about. Private cryptocurrencies generally mean that issued by an individual or a company and hence bitcoin is not private, it is decentralised. It is available on a public ledger. It is unprecedented, before it wasn't there. It is a completely new type of commodity asset or currency, so it is new.”
He added, “In my opinion, the regulation would be more towards treating Bitcoin and other cryptos as assets or commodities and not currencies.”
On interpreting what is a private cryptocurrency, Shetty said, “The definition of what a private cryptocurrency is, is still very wide and open. But what I believe is that the biggest problem that lawmakers have today is that you do not want a crypto, which competes with INR. As an industry, we are in sync with that.”
He further said, “I think we are looking at cryptos that can be used as assets, which is Bitcoin, and other deflationary cryptos that has been created with a limited supply. The second is crypto that can used as a utility. It will be very crucial to see what is the exact definition that the government or the bill has about private cryptos. But my belief is that when you look at Bitcoin and other blockchains, they are all public- crypto assets or utilities more than currencies.”
Meanwhile, Ratna said, “I think essentially the reason for the Central Bank Digital Currency (CBDC) is one of the motivations to crowd out private cryptocurrency. If you see, it has really risen in response to the kind of boom we have seen with cryptocurrency and so I think with this legislation coming in overnight, I think the intent of the government is fairly clear with this bill. As far as private cryptocurrencies are concerned, yes, I think there are some clear exemptions that are there. They have more to do with activity that happens from our offshoring centre, but the private cryptocurrency by itself is very much like any non-sovereign currency.”
For full interview, watch accompanying video.