banning private cryptocurrencies

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The Government of India has also included “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” in the list of 26 new bills likely to be introduced in the winter session of Parliament.

Starting from 29 November the winter season (during the Winter Session) A bill to regulate (cryptocurrency) will be introduced in the Parliament. The Official Digital Currency Bill, 2021 for Cryptocurrency and Regulation, is one of a total of 26 bills that have been listed for introduction. This comes a week after the first parliamentary panel discussion on the broad framework of crypto finance, where a consensus was reached that cryptocurrencies cannot be stopped, but should be regulated. According to the Bulletin-II of the Lok Sabha released on November 23, there are two motives behind bringing this proposed bill. This bill includes a proposal to ban all types of private cryptocurrencies in India except for some exceptions. There is also a provision for some exceptions in this so that technology related to cryptocurrency and its use can be promoted. With all, misleading advertisements in the media about the safety and investment potential and risks of investors’ money have long been a cause of concern. The government has held several meetings with all stakeholders to discuss the regulation of digital currencies. Prime Minister Narendra Modi has also chaired a high-level meeting with officials of various ministries and RBI on this issue.

Under this bill, all related parties including crypto investors, dealers, app developers, miners will come. Under the bill, the definition of cryptocurrency will be clear, that is, what will and will not be within the realm of crypto. It will bring clarity. This will also remove the confusion regarding tax and rule control on crypto. Experts say that fixing the legal framework of cryptocurrencies will bring stability to the market and the interests of investors will also be protected. However, the government and the Reserve Bank have already made it clear that they will not make crypto a part of the payment system in any way. Cryptocurrencies will not be accepted in any type of digital payment system.

On November 17, Reserve Bank of India (RBI) Governor Shaktikanta Das had expressed concern over cryptocurrencies, saying that such virtual currencies are associated with many deep concerns about the economic and financial stability of the country. Das’s statement came a few days after the meeting chaired by Prime Minister Narendra Modi on cryptocurrencies. In that meeting, deep concerns were expressed about the risks associated with cryptocurrencies.

Whether crypto will be defined as a digital asset or as a commodity is still under consideration. The most popular cryptos around the world are bitcoin and ether. Along with trading, its ever-increasing value has also attracted the attention of investors.

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