The government will move a bill to frame rules for cryptocurrencies aimed at prohibiting private coin while providing a framework for the creation of an official digital currency to be issued by the Reserve Bank of India (RBI).
The bill is listed among 26 items of legislation for consideration in the winter session of parliament, according to a bulletin issued by the Lok Sabha on Tuesday. The crypto industry is hopeful there won’t be a complete ban on cryptocurrencies..
“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,” the bulletin said with regard to the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. It also seeks “to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India.”
ET reported earlier this month that India is considering a middle path on cryptocurrencies as it finalises legislation for the winter session.
The RBI has expressed reservations over private cryptocurrencies with governor Shaktikanta Das flagging them as a threat to macroeconomic and financial stability.
The crypto platforms have argued that digital currencies need regulation and shouldn’t be banned.“While the description of the draft bill appears to be the same as in January 2021, several noteworthy events have occurred since January,” said Nischal Shetty, founder, WazirX. “First, the parliamentary standing committee invited a public consultation, and then our Prime Minister himself came forward to call for crypto regulations in India.”
The government had first listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, for the budget session but deferred the move for wider consultations.
A high-level government panel had in July 2019 mooted an outright ban on all forms of private cryptocurrencies.
Earlier this month, Prime Minister Narendra Modi had chaired a high-level meeting on cryptocurrencies with officials from the RBI, finance ministry, and the Securities and Exchange Board of India (Sebi).
Following that the parliamentary standing committee on finance met crypto industry representatives, stakeholders and experts. Panel chairman Jayant Sinha had told ET that the committee had taken no view on cryptocurrencies, adding that the industry claimed 15 million registered users with total investments at Rs 600 crore.
Concerns have been rising over the rising popularity of cryptocurrency as an investment.
“It is important that all democratic nations work on this (cryptocurrency) and ensure that it does not end up in wrong hands, which can spoil our youth,” the PM had said at The Sydney Dialogue last week