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Only few private cryptocurrencies besides RBI’s digital currency to be legalized in India; bill ready – ET Government

The Union government will likely present a bill in the next winter session of Parliament to ban all but a few private cryptocurrencies and create a framework to regulate the digital currency issued. by the RBI.

The Cryptocurrency and Official Digital Currency Regulation Bill 2021 is listed to be presented to Lok Sabha during the winter session, which is scheduled to start from November 29.

The bill seeks to “create a framework facilitating the creation of the official digital currency to be issued by the Reserve Bank of India.” It also seeks to ban all private cryptocurrencies in India, however, it allows certain exceptions to promote the underlying technology. of cryptocurrency and its uses “.

Currently, there are no regulations or prohibitions on the use of cryptocurrencies in the country. Against this backdrop, Prime Minister Narendra Modi earlier this month held a cryptocurrency meeting with senior officials, and it looks like strong regulatory action could be taken to address the issue.

Recently, there have been a growing number of advertisements, even featuring movie stars, promising easy and high returns on cryptocurrency investments lately as such currencies are said to be used to attract investors with misleading claims.

Last week, the Standing Committee on Finance, chaired by BJP member Jayant Sinha, met with representatives from crypto exchanges, blockchain, and the Crypto Assets Council (BACC), among others, and came to the conclusion that cryptocurrencies shouldn’t be banned, but they should be regulated.

The Reserve Bank of India has repeatedly reiterated its firm stance against cryptocurrencies, saying they pose serious threats to the country’s macroeconomic and financial stability and also doubts the number of investors trading there and their value. claimed merchant.

Earlier this month, RBI Governor Shaktikanta Das also reiterated his views against allowing cryptocurrencies, saying they pose a serious threat to any financial system because they are unregulated. by central banks.

The RBI had announced its intention to release an official digital currency in the face of the proliferation of cryptocurrencies like Bitcoin, about which the central bank had many concerns.

Private digital currencies / virtual currencies / cryptocurrencies have grown in popularity over the past decade. Here, regulators and governments have been skeptical of these currencies and fear the associated risks.

It can be noted that on March 4, 2021, the Court of Cassation canceled an RBI circular of April 6, 2018, prohibiting banks and entities regulated by it from providing services in the field of virtual currencies.

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