The cryptocurrency bill, the much-awaited law to regulate virtual currency in India, is expected to be taken up by the Union Cabinet soon. A high level committee headed by Secretary (Economic Affairs) had already submitted the report on cryptocurrency. The central government had earlier constituted the panel to study the issues related to digital currencies and propose specific actions with respect to crypto coins. “Cabinet note on cryptocurrency (bill) is ready. I am waiting for the cabinet to approve it,” Finance Minister Nirmala Sitharaman said on Monday.
The proposed bill missed being introduced during the monsoon session of Parliament. According to the bulletin for the budget session prepared by the Lok Sabha Secretariat, the main objective of the cryptocurrency bill will be “creation of an official digital currency to be issued by the Reserve Bank of India”. The bill seeks to “ban all private cryptocurrencies” in India” but it will allow “certain exceptions to promote cryptocurrency and the technology underlying its use,” the bulletin noted. It has recommended that all private cryptocurrencies, except any virtual currencies issued by the state, be banned.
Blanket ban or asset class? What the Government Says on Cryptocurrency
Earlier in May, the Finance Minister said that a very calibrated position would be taken on crypto and digital currency as the world continues to move faster with technology. There have been reports that bitcoin and other cryptocurrencies may be allowed as an asset class in India.
However, the central government will not accept cryptocurrency as legal tender any time soon. Sentra has repeatedly reiterated that it does not consider cryptocurrencies to be legal tender or coinsurance. During Budget 2018-19, the central government had said that it would “take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payment system.”
RBI on Cryptocurrency
In April 2018, the Reserve Bank of India (RBI) advised “all entities regulated by it” not to deal in digital currencies. Later in 2020, the Supreme Court set aside the central bank’s 2018 circular and providing cryptocurrency-related services to banks and financial institutions. facility will be allowed.
RBI has concerns over cryptocurrencies being traded in the market and has conveyed the same to the government. On cryptocurrency, there is no distinction between the central bank and the finance ministry, RBI governor Shaktikanta Das had maintained. “We must now wait for the final decision of the Center on the matter,” he said.
crypto craze in india
According to a report by Analytics Insight, Indians have invested around $6.6 billion in cryptocurrencies as of May 2021. It saw a jump of over 600 percent from $923 million in April 2020. Around 15 crore Indians are said to have invested in cryptocurrencies. Currently, over 350 startups operate in the blockchain and cryptocurrency sector. Given the huge investor interest and the rapidly evolving cryptocurrency market, the government is taking a cautious approach towards cryptocurrencies.
“We are glad to see that the government is pushing for crypto legislation. However, we do not know the final elements of the bill and what it means for the crypto community and companies in India. Emerging technologies such as blockchain and cryptocurrencies, AI and ML We are the key to future economic growth. With our large tech-savvy population, we are ideally positioned to adopt, grow and lead the tech space,” said Nischal Shetty, Chief Executive Officer, WazirX.
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