The argument regarding the legalization of cryptocurrencies in India has been ongoing for some time, with the finance ministry and the Reserve Bank of India (RBI) debating the best course of action.
Bitcoin is unquestionably the most successful, although volatile, digital money based on price swings. According to statistics gathered by coinmarketcap.com, Bitcoin’s lowest trading price was $25,987; and it reached its peak price of $68,789 in 2021.
Its price fell by $3,848 in 24-hour trade on December 28 and closed at $47,518.26. Bitcoin has a market capitalization of $904,918,128,064.42 and market domination of 40.33%.
In 2021, the second most popular currency, Ethereum, saw significant changes. Within 365 days, the lowest trading value was $692, and the maximum trading value was $4,891.7. On December 28, the price fell by $300, allowing it to trade at $3,792.
Despite having a market capitalization of $448,879,821,921.82 and a market domination of 20.05%; Ether suffers the same insecurity challenges as Bitcoin. The parameters for other major cryptocurrencies are similar.
With this kind of volatility in the market, there are legitimate questions about the long-term viability of digital currencies. And if Finance Minister Nirmala Sitharaman and her staff are prolonging the process of presenting a law on it, it shows that financial experts want to be sure before proceeding.
In India, How Did The Year 2021 Go For Cryptocurrency?
Investment in cryptocurrencies increased by about 400% in a single year, rising from $923 million in April 2020 to nearly $6.6 billion in May 2021.
Cryptocurrency exchanges such as BuyUcoin recognize that meme currencies SHIB and DOGE; as well as MATIC and BTC (Bitcoin), were among the most commonly traded coins in India in 2021 and may continue to be so in 2022.
Experts believe the administration would come up with anything tangible in the Union Budget 22-23 session; after the winter session of Parliament ended on December 23 without any debates on the crypto law.
So Far, The Story of The RBI & Cryptocurrencies Is As Follow:
Earlier in November 2021, the RBI informed its board that a comprehensive ban on cryptocurrency was required since partial limitations would not suffice. This followed the Supreme Court’s 2020 decision; in which the supreme court overturned the RBI’s 2018 regulation prohibiting banks from facilitating crypto transactions.
The Reserve Bank of India (RBI) has been a vocal opponent of cryptocurrency since 2013, fearing that it will weaken its regulated enterprises and destabilize the economy.
Apart from destabilizing the economy, the excessive price volatility of cryptos and problems in tracking transactions were additional worries on the RBI’s plan.
The RBI is considering launching a central bank digital currency (CBDC) to challenge private cryptocurrencies. The top bank even examined numerous matters connected to the CBDC and private cryptocurrencies during the 592nd meeting of the central board of directors; held in Lucknow. However, nothing can be speculated on at this time.
Meanwhile, the RBI is developing an official digital currency to promote Non-Fungible Tokens (NFTs), which the centre is also exploring.
“Investment In Crypto Grew By Around 400%.” What Is The Outlook For 2022 In A Single Year 2021?
In India, 2022 might be the year of answers and clarity for cryptocurrency trading. The government may first introduce legislation to regulate cryptos, followed by legislation to put digital currencies within the Securities and Exchange Board of India (SEBI).
FM Sitharaman has previously assured the people, via Rajya Sabha, that commercials will not be prohibited. However, the RBI and SEBI are taking initiatives to raise awareness.
There are many uncertainties about the future of cryptocurrency trading in India, but finding answers will take time. As previously stated, the Finance Ministry and the RBI are equally worried about the unpredictability of cryptocurrency price changes.
