Govt lists bill seeking to ban all pvt cryptocurrencies, allows official digital currency of RBI

The government on Tuesday listed a new bill for the upcoming Winter Session of Parliament that seeks to ban all private cryptocurrencies in the country, while allowing an official digital currency to be issued by the Reserve Bank of India.

The bulletin from the Lok Sabha on the purport of The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 stated:

“To 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.”

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This bill on cryptocurrencies is among 26 bills listed for the session. These also include a bill to repeal the three farm laws, a proposal for which is to be discussed by the Union Cabinet on Wednesday.

The winter session of the Parliament is scheduled to start on November 29 and conclude on December 23.

This development comes amidst numerous developments in the world of cryptocurrency. On the one hand, the numerous cryptocurrency exchanges in the country were aggressively promoting these digital currencies through high-profile advertisements and endorsement from Bollywood stars.

At the same time, the government also held a very high-level meeting which was headed by Prime Minister Narendra Modi and they were not in favour of such an aggressive promotion by these crypto exchanges. In response, the crypto exchanges stopped airing these advertisements and adopted a stance of certain self-regulatory mechanisms.

The journey of cryptocurrency in India has been very uncertain, especially with the Reserve Bank of India (RBI) advising banks against any dealings with digital currencies. However, the Supreme Court later set aside this order.

The government in March this year had stated in Parliament that it does not consider cryptocurrencies as legal tender or coin, and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or part of the payment system.