☕️ Dossing on Crypto Ban
Latest:
Government is set to introduce “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” in the winter session of Parliament beginning 29 November for consideration and passing. The bill aims “to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” it said in a notification on Lok Sabha website.
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Why?
Cryptocurrencies are a very serious concern from a macro economic and financial stability point of view, Das said a few days ago, while reiterating his stand once again recently, saying, “There are “far deeper issues” involved in virtual currencies that could pose a threat to India’s economic and financial stability.”
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The Prime Minister’s caution comes days after he held discussions on how to move forward on cryptocurrency in India, with concerns raised on unregulated crypto markets becoming avenues for money laundering and terror financing.
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Many lawmakers, in the meanwhile, have also expressed concerns about the nature of ads carried by cryptocurrency exchanges. A consensus was reached in that meeting that these “irresponsible advertisements”, which promised wild profits to consumers by investing in crypto, were misleading youths in the nation and must be stopped.
Several Bollywood stars, including legendary Amitabh Bachchan, Ayushmann Khurrana and Ranveer Singh, who have starred in several of the country’s biggest blockbusters, have promoted cryptocurrency trading in TV and newspaper ads.
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One of the poll conducted by the rockstar of India’s Fintech ecosystem, VSS, revealed the public opinion on the Crypto ads as “Ugly”
The Ambiguity:
The use of the term “Private”, in the India’s cryptocurrency bill, has left the country confused.
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To clear this up we decided to take a deepdive into types of blockchain out there:
Types of Blockchain:
Public Blockchain
If one desires to create a completely open blockchain, similar to Bitcoin, which enables anyone and everyone to join and contribute to the network, they can go for a public blockchain. In a public blockchain, anyone is free to join and participate in the core activities of the blockchain network. Anyone can read, write, and audit the ongoing activities on the public blockchain network, which helps a public blockchain maintain its self-governed nature.
Private Blockchain
If one needs to run a private blockchain that allows only selected entry of verified participants, like those for a private business, one can opt for a private blockchain implementation. A participant can join such a private network only through an authentic and verified invitation. A validation is also necessary either by the network operator(s) or by a clearly defined set protocol implemented by the network.
Permissioned Blockchain
The third category of blockchains is permissioned blockchains. Permissioned blockchains allow for a mixed bag between the public and private blockchains and support many customization options. These include allowing anyone to join the permissioned network after suitable verification of their identity, and allocation of select and designated permissions to perform only certain activities on the network. For example, Ripple, one of the largest cryptocurrencies, supports permission-based roles for participants.
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Examples of public crypto: Bitcoin, Litecoin, Ethereum, Ripple
Examples of private crypto: Monero, Particl, Dash, Zcash, Verge, Beam, Horizen
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A more detailed comparison of individual coins: Dash vs Bitcoin vs Monero vs Zcash
The speculated work arounds:
However, as many industry executives and experts had noted last time when a ban of this sort had come up, banning cryptocurrencies may be technologically impossible. Industry executives said while the government can stop the use of the local currency to buy crypto, there’s virtually no way to ban crypto wallets, which exist online and aren’t under the purview of banks and governments. Peer-to-peer networks are also difficult to police as people can simply transfer money to each other through bank accounts and transfer the equivalent crypto among each other through wallets.
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While another wild thought on twitter being:
Possible verdicts:
- cryptocurrencies may be barred for the use of transactions or making payments, but allow them to be held as assets like gold
- Private cryptocurrencies like Monero, Particl, Dash etc. might be banned whereas Public cryptocurrencies like Bitcoin, Litecoin, Ethereum will be considered under asset class
- Only Permissioned Blockchain like Ripple are allowed and others are asked to comply with some kind of identity management system.
- Ban on all cryptocurrencies!
But the impact will be on exchanges like Coinswitch Kuber, CoinDCX, WazirX etc. and not on the product companies who mostly operate from outside India.
How are we dealing with this market crash at Doss:
We have already started day trading, we saw huge dip in one of our investments “Matic” from 145 to 100 in matter of hrs and decided to buy more Matic at 100 and sold it off at 120. we are repeatedly doing so to recover as much as possible.
Our motto is to day trade in order to recover our portfolio loses before the verdict, cause the market ain’t coming up before Nov 29 and if we go with the pessimists, there might not be any market left to trade in post Nov 29.
At the end, atleast this dramatisation will increase the penetration of crypto knowledge among the citizens. Those who are curious will do a google search and learn about cryptocurrencies.
😃 We hope it was a good read for you!
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