Crypto market crashes in India as rumors abound
The Indian crypto market has seen a major crash in prices over the last 12 hours as the government plans to bring in a crypto bill in the Parliament for discussion and approval and this has set off various rumors.
As reported yesterday, the bill seeks to bring in the framework for central bank digital currency while at the same time looking to ban private cryptocurrencies except for a few cryptos which will be retained for the sake of technological innovation and growth. The topic of the Bill does not explain the details of how the cryptos would be classified as private and not-private and this has led to a lot of rumors with many investors being led to believe that major cryptos like Bitcoin, Ethreum, Solana, etc would be banned while the supporters continue to temper the talk by saying that only those cryptos that keep their ownership private would be banned but so far, not much clarity has emerged on this topic. This has led to the crash of the prices of various cryptos in Indian exchanges by over 20%.
The classification of whether crypto is private or not can be based on any number of theories and it depends on what theory on which the regulator would base their findings. Anything that is not owned by the government or for which the government has no access, could also be classified as private crypto but unless the Bill is tabled, it will not be very clear. But one thing is clear which is the fact that the Indian authorities have started rolling the ball for CBDCs and have well and truly joined the race. Like many other governments around the world, especially the bigger ones, they may want to clear the decks for the launch of the CBDCs, and hence the regulations have been brought in to ban a few cryptos while regulating the others to ensure that the CBDC gets the pride of place in the digital asset ecosystem.
This is the general practice around the world where the authorities have been viewing the CBDCs as a way of ensuring that the cryptos, which do not contribute to the government coffers, are kept in check and they believe that once this happens, it will force the users to shift their ways back to either the traditional financial ecosystems, digital wallets or the CBDCs and give up on cryptos in a steady manner.