We have launched our mobile app, get it now. Call : 9354229384, 9354252518, 9999830584.  

Current Affairs

Cryptocurrency regulation across world

Date: 26 November 2021 Tags: Bills & Laws

Issue

The government is planning to regulate cryptocurrency by introducing the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.

 

Background

A framework will be created by the government for creation of an official cryptocurrency that will be issued by RBI.

 

Details

  • All the private cryptocurrencies will be banned. However, the underlying cryptocurrency technology and its uses will be allowed.

  • The cryptocurrency prices in local exchanges fell after the decision. However, the prices remained unchanged on global scale.

  • Currently there is no ban on cryptocurrency. The regulations and control on cryptocurrency varies across the globe.

 

Global regulation

  • El Salvador has given legal status to cryptocurrency Bitcoin whereas China has imposed stringent regulations on cryptocurrency.

  • Canada is among the first countries to adopt crypto. The Canada Revenue Authority (CRA) reognises it as commodity.

  • In Israel, crypto is defined as financial asset. Tax authorities consider it to be an asset and demands 25% on capital gains.

  • In UK, it is neither considered a currency or money. They have a unique identity and cannot be compared to any other form of investment.

 

Central Bank Digital Currency (CBDC) 

  • The CBDC is set to be launched by RBI which is considered a digital form of fiat currency. It can be transacted using blockchain wallets regulated by RBI.

  • User can conduct domestic and cross-border transactions using CBDCs. It will not require third party banks or financial institutes.

  • To make rupee competitive in international market, India needs successful implementation of the pilot project.

  • The CBDC cannot compete with private cryptocurrencies that have grown recently. The CBDCs can succeed if they are effectively used.