Cryptocurrencies, News

Massive Crypto Crash and the Bill That Caused It: Explained

After the government announced it would introduce the cryptocurrency bill to Parliament’s winter session, the bill seeks to ban all private cryptocurrencies within the country. Hours later, all crypto prices plummeted by 15%.

All major cryptocurrencies experienced a drop of 15% or more as of November 23rd at 11:45 pm. Bitcoin fell by approximately 17 percent, Ethereum by about 17%, and Tether by nearly 18%.

The Cryptocurrency and Regulation of Official Digital Currency Bill (2021) aims to provide a framework that facilitates the creation of a digital currency official issued by the Reserve Bank of India. While the bill will ban all private cryptocurrency in India, it will allow for certain exceptions to support the technology and its use.

The Parliament will introduce the crypto bill, which seeks to regulate digital currency during the winter session that begins on November 29. According to a Tuesday government statement, the bill is one of 26 that are eligible for introduction.

The first ever Parliamentary panel discussion about cryptocurrency took place last week. It was unanimously agreed that cryptocurrency must not be banned in India but should be regulated.

Jayant Sinha, BJP’s chairman, presided over the meeting of the standing committee on finance. He met representatives from crypto exchanges, Blockchain and Crypto Assets Councils (BACC), industry bodies and other stakeholders on November 16.

Prime Minister Narendra Modi also presided over a high-level meeting of officials from different ministries and the Reserve Bank of India on the subject. PM Modi called on democratic nations to work together in regulating virtual currencies private, as they could end up in “wrong hands.”

Last Thursday’s speech at the Sydney Dialogue, PM Modi stated that it was crucial to make sure the digital currencies are not used illegally as they could ruin the youth.

The RBI is reluctant to accept cryptocurrency, expressing concern over possible risks to financial stability and capital controls. The Securities and Exchange Board of India has expressed concerns about unregulated growth of cryptocurrency in India. This was done with the aim of protecting vulnerable retail investors.