Prominent Indian cryptocurrency exchanges witnessed a surge in crypto trading volume on their respective platforms hours after the government on Tuesday evening listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 to be likely introduced in the upcoming Winter Session of the Parliament. The volume went up across multiple exchanges in the country due to panic selling among investors that consequently led to the decline in local prices of cryptocurrencies including Bitcoin, Ethereum, and others.
From an average 24-hour trading volume growth of under 15-20 per cent, most of the Indian exchanges saw growth in triple digits. For instance, Unocoin’s 24-hour volume was up 318 per cent with $2,155,656 worth of cryptos traded. Likewise, Zebpay volume jumped 145 per cent ($239,243), CoinDCX ($205,259,463) volume increased 106 per cent, volume on WazirX grew 178 per cent ($364,587,465) while Bitbns saw 72 per cent ($58,127,681) growth, data from CoinMarketCap showed at the time of filing this report.
“The legislative agenda on Wednesday was the single biggest reason for the panic selling by investors on crypto exchanges. This is being matched by exactly the same buying pressure as you cannot sell until someone buys. The absence of knowledge about what is happening on the regulatory front or misinterpreting the wording of the agenda had caused the panic,” Ajeet Khurana, Crypto expert and Founder, Genezis Network told Financial Express Online.
The bill would seek “To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India,” the agenda had noted. “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.” However, there has been no definition of what is a private cryptocurrency in India and outside.
“The term private crypto has no definition of it. In the Budget session, the government had first used this term. However, the confusion on what it is has gone as on multiple occasions, the government has clarified that what it means by private is cryptocurrencies that are issued by entities other than the government. Hence, none of the cryptos are issued by the government, hence all of them are private,” added Khurana.
Crypto investments in India have surged to over $10 billion from $923 million in April last year, according to a recent report by crypto research and intelligence platform CREBACO. Hence, it would be interesting to see ahead how would regulations treat investments by Indian crypto investors. Last week, Prime Minister Narendra Modi had cautioned the crypto sector to ensure that “crypto doesn’t end up in the wrong hands.” Speaking at the Sydney Dialogue, PM Modi had said, “It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth.”
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