The Indian government will move a Bill that seeks to prohibit all private cryptocurrencies in the country during the winter session of the Parliament starting on 29th November.
It will be called the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. With the new Bill, the Union government aims to create a facilitative framework for creating the official digital currency to be issued by the Reserve Bank of India (RBI), while banning all private cryptocurrencies in the country.
However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its usage.
A notification issued by the government says, "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." Specific details of the Bill are still not available in the public domain.
The Bill has been listed for introduction, consideration and passing in the Lok Sabha. It is among 26 new Bills, which are to be introduced in the upcoming session of the Parliament.
As reported by Moneylife, cryptocurrencies are spreading like multi-level marketing (MLM) schemes in the country, while the government has been watching in silence. The Union government's stubborn reluctance to ban or regulate the spread of cryptocurrencies through advertisements, paid influencers and content marketing to create the same cult-like mania promoted by MLM companies and pyramid scheme operators tells its own story.
The finance ministry has been silent about the exaggerated returns and fake claims by crypto exchanges and their issuers. This is happening with the tacit support and, perhaps, active participation of powerful politicians. RBI had signalled its discomfort over cryptos and banned banks from holding or facilitating these currencies. But this order has been set aside by the Supreme Court (SC). (Read: Crypto Currencies Spread Like MLM Schemes while Government Watches in Silence
Earlier this month, a meeting chaired by prime minister (PM) Narendra Modi reviewed issues related to cryptocurrencies in India. Before that RBI governor Shaktikanta Das had raised the alarm by calling cryptocurrencies a grave concern from a macroeconomic and financial stability point of view.
PM Modi had earlier said that all democratic countries need to work together on cryptocurrency and ensure that it does not end up in the wrong hands. Giving an example of the virtual currency, he had said, "Take cryptocurrency or Bitcoin for example. It is important that all nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth."
While crypto is spreading like wildfire in India, there is no regulation for it. Without specific approval from the Parliament and amendment in the RBI Act, private currency like crypto cannot be treated as valid legal tender.
Several high-level meetings have been held to discuss the regulation of cryptocurrencies. The parliamentary standing committee had also called for the law.
Currently, RBI is the nodal agency responsible for all issues about crypto assets in India, thanks to a recent supreme court (SC) judgement. On 4 March 2021, the SC had nullified a circular from RBI that had banned cryptocurrencies. RBI's circular on 6 April 2018 had prohibited banks and entities regulated by it from providing services to virtual currencies.
The apex court ruling effectively lifted the ban on cryptocurrency trading in India, leading to the crypto craze in India. An increasing number of crypto platforms started luring the public into investing from as low as Rs100 into cryptocurrencies in an incomprehensible manner amidst the absence of a dedicated law on crypto assets and cryptocurrencies. (Read: Crypto Cartels Flourish in India, while Union Govt Huddles To Find Regulatory Solution