The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 seeks “to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India.
New Delhi: India is set to introduce a bill to ban private cryptocurrencies after the government announced that it will introducing a new financial regulation bill. The bill that “seeks to prohibit all private cryptocurrencies in India” is among 26 pieces of legislation planned to be brought to Parliament in the session beginning next week, according to a Lok Sabha release.
India at present has no regulation for cryptocurrencies – a set of decentralised digital currencies such as Bitcoin and Ethereum that are not regulated by any banking regulator. It is to be noted that the cryptocurrency bill is listed at a time when the level of interest in the subject is very high
Move Bill To Ban All ‘Private Cryptocurrencies
- ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, it is among the list of new bills for introduction, consideration and passing.
- The Bill will 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
PM warned against youth falling into crypto trap
Addressing an event last week, PM Modi had also urged cooperation between the world’s democracies to ensure cryptocurrencies like Bitcoin do not “end up in the wrong hands”.
“Nations should recognise national rights and at the same time promote trade, investment and larger public good. Take crypto-currency or bitcoin for example. 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,” PM Modi had said.
On November 13, Prime Minister Narendra Modi chaired a meeting to discuss the future of cryptocurrencies, amid concerns that unregulated crypto markets could become avenues for money laundering and terror financing.
RBI working towards own digital currency
The RBI had in 2018 banned the banking system from cryptocurrency transactions, which was struck down by the Supreme Court in 2020.
In July, RBI said it was working towards its own digital currency and the Central Bank Digital Currency (CBDC). “A CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies that have mushroomed over the last decade. Private virtual currencies sit at substantial odds to the historical concept of money,” RBI deputy governor T Rabi Sankar said.
While the government and the RBI have been discussing the legislation on the issue for several months now, there has been a sharp increase in interest in cryptocurrency with several individuals, including senior citizens investing in private digital currencies.
India is estimated to have the largest number of cryptocurrency investors in the world, though value of investment could be smaller than in western countries.
