New Delhi: Everyone speculating a ban on cryptocurrencies in India may take it easy as the government is set to introduce a Bill in the upcoming winter session of Parliament which, if passed, will only ban the ‘private’ digital currencies.
“The Bill seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to a report in PTI.
The Bill, if passed, will frame guidelines to regulate cryptocurrencies in India. The Bill is aimed at prohibiting crypto coins, while providing a framework for the creation of an official digital currency to be issued by the Reserve Bank of India (RBI).
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Investors trading in Bitcoin, Ethereum, and the likes may not be worried because these are public blockchain-based cryptocurrencies, which offer a degree of anonymity but are starkly different from what is known as private cryptocurrency that could refer to Monero, Dash, and others of its sort.
What’s the difference between ‘public’ and ‘private’ cryptocurrency?
Even as the definition of what typically constitutes as ‘private’ cryptocurrency has not yet been clearly stated by the government yet, it is expected that Bitcoin, Ethereum, and other crypto tokens are not likely to be banned as they are based on public blockchain networks, which mean transactions made using these networks are traceable, while still providing a degree of anonymity to users.
On the other hand, private cryptocurrencies could be refered to Monero, Dash, and other which, although built on public blockchains, hide transaction information giving privacy to users. Monero gives privacy and, hence considered a private token.
Is a blanket ban possible?
Cryptocurrency experts believe that since a cryptocurrency lacks any inherent value or liquidity, it may prove difficult to ban the tokens, which could be called an asset, a commodity, a currency, or even a security. According to experts, millions of people around the world could theoretically hold such a currency, which are basically pieces of code that can’t be ‘banned’ and also agree to use it as a medium of exchange, which will then lend it value.
Analysts argue that transferring cryptocurrencies from one wallet to another is essentially not much different than sharing files from one computer to another. So, a regulatory ban might not take away people’s ability to send cryptocurrencies to each other.
The legislation may stipulate a minimum amount for investments in digital currency, while banning their use as legal tender, according to sources of news agency Bloomberg.