New cryptocurrency bill seeks to ban private players
- The Union Government will introduce a Bill to regulate cryptocurrency and ostensibly ban all private cryptocurrencies, along with 25 other pieces of legislation, in the winter session of Parliament .
- The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which is yet to be officially approved by the Cabinet, seeks to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India.
What are Cryptocurrencies?
- Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
- Examples: Bitcoin, Ethereum etc.
Key Provisions of the Bill:
- It seeks to regulate cryptocurrency and ostensibly ban all private cryptocurrencies.
- It seeks to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India.
- So far, the precise contours of the Bill are not in the public domain and no public consultations have been held.
Advantages of Cryptocurrency:
- Protection from inflation
- Self-governed and managed
- Currency exchanges can be done easily
- Cost-effective mode of transaction
- A fast way to transfer funds
- Secure and Private
- Cryptocurrencies don’t use middlemen, so transactions are usually easier, faster and require less or no additional transaction fees.
- Each cryptocurrency transaction is a unique exchange between two parties, which protects users from issues like identity theft.
Disadvantages Of Cryptocurrency:
- Can be used for illegal transactions
- Data losses can cause financial losses
- Decentralized but still operated by some Organization
- Some coins not available in other fiat currencies
- Adverse Effects of mining on the environment
- No refund or cancellation policy
- Susceptible to hacks
- Crypto Currency issuers claim no responsibility to stabilise the price of Cryptocurrency. Hence it is open to massive fluctuations"