In response to a question whether the government has any proposal to recognize bitcoin as a currency, the Finance Minister Nirmala Sitharaman answered in the negative Lok Sabha,
The statement came before a bill was introduced to “ban” all private cryptocurrencies, while “promoting the underlying technology” and providing some exceptions for its uses. The proposed legislation, planned for the current session of parliament, would also create “a convenient framework for the creation of an official digital currency to be issued by the RBI”, the government said last week, amid intense lobbying to “regulate” cryptocurrencies. , instead of banning them in India. Bitcoin is the most popular cryptocurrency globally.
Supporters of the demand for regulation have argued that it is difficult to ban the cryptocurrency, and that the entire market will go dark net if the government goes ahead with the ban. NS reserve Bank of India Leading the demand for the ban.
Responding to another question, Finance Minister Pankaj Choudhary told the lower house that in October, the RBI had decided to amend the law to broaden the scope and definition of “bank note” to include currency in digital form. A proposal was sent to the government for
“The RBI is probing the use cases and working out a phased implementation strategy to launch the CBDC without any disruption,” Choudhary said.
The RBI has opposed the introduction of a private cryptocurrency, arguing that it is prone to misuse and has no underlying assets from which its value derives. In addition, there are fears that private digital currency will result in dollarization of the economy and have a significant impact on its ability to manage money supply, inflation, exchange rates. On the contrary, it wants to start work on the CBDC in the next few months.
“The introduction of a CBDC has the potential to provide significant benefits, such as less dependence on cash, higher segregation due to lower transaction costs, lower settlement risk. The introduction of CBDCs is likely to lead to more robust, efficient, reliable, regulated and fiat-tender- based payment option will pave the way. There are also associated risks which need to be carefully assessed against the potential benefits,” Chowdhury said in Parliament.
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