Why is the Indian government banning cryptocurrencies in India and what is cryptocurrency?

The Indian government has spoken of banning private cryptocurrencies like bitcoin in India through a legislative process. Also, the government of India has planned to bring a law in the issue of the official digital currency by the central bank. However an Indian panel of the government of India has spoken of banning all private cryptocurrencies.

On Friday, the news published on a website of the government of India lower house said that a framework for the creation of official digital currency issued by the RBI (reserve bank of India) would be prepared which would be very simple and convenient.

It states that in the same parliamentary session a law will be brought out in the manner listed by debate, in which "an effort will be made to shut down all private cryptocurrencies in India. Once it is passed from parliament, it will be fully implemented."

However, in 2019, a government panel demanded a shutdown of private cryptocurrency. In which, if anyone is found involved in this, he can be sentenced to jail for up to 10 years or his digital currency can be harmed.

However, the government panel asked the government of India to consider launching an official digital currency of its own to act like notes in banks through the reserve bank of India.

The reserve bank of India took out an order in April 2018 asking financial institutions to break their links with businesses and individuals dealing with all cryptocurrencies such as bitcoin, etc. within a few months.

However, in the months of March 2020, the supreme court handed over the transaction of cryptocurrency to the banks. Getting this permission from a central bank was a big setback to all those thriving industries.

Apart from India, other government in the world are carefully understanding the way cryptocurrency is regulated, but no major economy has taken any specific steps to ban them. However, the financial system has been concerned about its misuse, which is generally true.

What is cryptocurrency?

Cryptocurrency is a digital currency that we use as payment in exchange for services and goods. This currency is not created by any government but by a person or group of people named Satoshi Nakamoto (according to Wikipedia). That is why no country's government has control over it.

The security of cryptocurrency is very high, making it less likely to be hacked or stolen. In it, apart from the giver, no other detail can be seen.

Cryptocurrency is available in limited quantities in the world. It is not available in much quantity like the currency of a country. The manufacturer of cryptocurrency has made it in limited quantity, which sometimes causes the rate drops down significantly, which also causes a lot of damage to the users.

Investing money in cryptocurrencies is a risky business. It has great potential for both profit and loss. If you want to invest money in this, then you will have to do a littile study about it.

Some of the popular cryptocurrency in the market are as follows :

1. Bitcoin

2. Ethereum

3. Tether

4. XRP 

5. Polkadot

6. Cardamo  etc.

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