A bill to ban all private cryptocurrencies and facilitate the introduction of a Central Bank Digital Currency (CBDC) tops the government’s busy agenda for the winter session of Parliament.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 along with the Banking Laws (Amendment) Bill, 2021, which paves the way for privatization of two public sector banks, the PFRDA (Amendment) Bill, 2021 which complements the Budget 2019 announcement. The bill to separate the National Pension System Trust from the pension regulator and repeal all three agricultural laws are the most important of the 26 bills listed for debate and passage by the government in the upcoming session.
official digital currency
The most important is the Cryptocurrency Bill which “proposes to create a facilitating framework for the creation of an official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to ban all private cryptocurrencies in India. Allows certain exceptions” to promote cryptocurrency and the technology underlying its use.
This is the second attempt to introduce a bill in the House to ban all private cryptocurrencies. The government had listed a similar bill to ban all private cryptocurrencies and facilitate CBDCs during the budget session. However, this bill was not brought in the Lok Sabha. The bill was not listed in the subsequent monsoon session. However, it has been included for the winter session.
This comes after Prime Minister Narendra Modi’s warning that cryptocurrencies could fall into the “wrong hands” as it could “spoil the youth”. Earlier this month, Modi chaired a high-level meeting of all stakeholders including the RBI and the finance ministry, all of whom expressed concern over the potential misuse of cryptos and advertising for them.
The Bill incorporates the views of RBI Governor Shaktikanta Das, who said in an interview business Line In August, said: “We have major concerns about private cryptocurrencies from the point of view of financial stability. Private cryptocurrencies are different from Distributed Ledger Technology (DLT) or blockchain. They should not be mixed.” Also he said that DLT or Blockchain technology is nothing new. It is an open-source technology. It is being used even today by many corporates for their business functions. The technical part can continue to be used and exploited without the private cryptocurrency.
A joint advertisement by Indian crypto exchanges and industry bodies states that investments in Indian crypto assets by Indians have crossed ₹6 lakh crore. There are reports quoting research firm CREBACO, which states that the number of crypto investors has crossed 100 million.
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