According to ANI, the govt will introduce ‘The Cryptocurrency & Regulation of Official Digital Currency Bill, 2021’ in winter session of Parliament. The Bill seeks to create a facilitative framework for creation of official digital currency to be issued by RBI & ban all private cryptocurrencies in India.
A bill to prohibit all private cryptocurrencies in India, with certain exceptions to promote the underlying technology and its uses, is among 26 bills to be introduced in the upcoming winter session of Parliament.
Titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, it is among the list of new bills for introduction, consideration and passing.
To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India,” the bulletin listing the legislative business posted on Lok Sabha’s website said.
The winter session of Parliament starts from November 29.
“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 added.
The RBI is examining the feasibility of launching its own central bank digital currency but is yet to decide on the possible date for launching a pilot project.
However, the Lok Sabha bulletin did not provide any other details about the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
Earlier this month, a high level meeting convened by Prime minister Narendra Modi held a comprehensive review on cryptocurrencies and the way forward.
Government sources had said that it was looking at “forward looking and progressive” regulation of cryptocurrency and they had made it clear that an unregulated market for digital currency cannot be allowed to become avenues for money laundering and terror financing.
During the meeting there was a strong view that attempts to mislead the youth through non-transparent advertising, that over-promised, needed to be stopped, sources had pointed out.
Shortly after this meeting, Parliament’s standing committee on finance met to seek views from various industry participants.
While suggesting that a ban may not help, industry representatives told the parliamentary standing committee that cryptocurrencies should be regulated since they cannot be stopped, amid concerns over security and investor protection by some of the panel members.
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”.
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.
The Reserve Bank has consistently maintained the need to ban private digital currency.
Earlier this year, the RBI had conveyed its decision to seek a ban on such instruments after expressing serious concerns.
While asserting that the technology of blockchain should be encouraged, the central bank questioned the purpose of cryptocurrencies to be labelled as a currency. It had said that a currency is a sovereign right and cannot be assigned to any individual entity.
There are concerns over volatility in their price apart from their impact on the economy.
The central bank has also raised security risks linked to cryptocurrencies, saying it could give rise to money laundering and terror financing because of the anonymity of the transactions.
The RBI has also pointed to the dangers to macroeconomic management if these instruments are allowed as they would pose “serious risks” to the financial system of the country.
In 2019, the government had appointed an inter-ministerial panel headed by the then economic affairs secretary Subhash Chandra Garg which had backed a ban on private cryptocurrencies.
Since then there has been intense discussions on the issue while the sector has lobbied hard to prevent a complete ban.