According to a release from Lok Sabha late Tuesday evening, India’s upcoming cryptocurrency legislation could ban all private cryptocurrencies in the country with certain exceptions.
The government is expected to present the “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” at the upcoming winter session of Parliament, with which it will attempt to create a framework for the creation of India’s official digital currency, which will be used by the Reserve is to be issued to Bank of India (RBI).
While the government said it would “ban all private cryptocurrencies” through the legislation, the bill will allow certain exceptions to “promote the underlying technology of the cryptocurrency and its uses”.
It is not clear whether these exemptions apply to specific cryptocurrencies or just to the underlying virtual currency technology that runs on blockchain.
The long-pending bill has been put up for introduction, scrutiny and approval in parliament.
The RBI is a strong proponent of an official digital currency called the Central Bank Digital Currency (CBDC), which is largely stable as it is backed by government reserves. However, it did not have a favorable outlook for cryptocurrencies and at one point even banned their use altogether.
In July, T Rabi Sankar, deputy governor of the central bank called that it is working on a “phased implementation strategy” for the CBDC to assess its use in wholesale and retail.
It is worth remembering that last year the Supreme Court of India lifted RBI’s banking ban on cryptocurrencies. When the virtual currency was banned, the central bank raised concerns about consumer protection, market integrity and money laundering.
During a meeting between industry executives and a parliamentary body earlier this month, the greater consensus was that cryptocurrencies needed some kind of regulation.
Prime Minister Narendra Modi had too allegedly chaired a high-level session earlier this month on the use of virtual currency, which believed unregulated crypto markets should not become avenues for money laundering and terrorist financing.