Crypto Asset Bill Proposes To Prohibit Use Of Crypto As Currency

The Crypto Asset Bill proposes to prohibit usage of crypto asset as currency substitutes or as payment systems for remittances. The bill also proposes to establish a facilitative framework for distributed ledger technology and also lay the groundwork for creation of the official digital currency to be issued by the Reserve Bank of India (RBI) and regulated under the RBI act, sources told NDTV.

The bill which will be presented in the winter session of Parliament also proposes to establish a regulatory framework to regulate the evolving space and to prohibit advertisements and the spread of misinformation to the public in line with global approach.

The bill seeks to minimise financial stability risk by suitably ring fencing the formal financial sector from crypto assets

As the underlying technology of crypto assets are still evolving and has many uses, the bill proposes exemption to any person using technology underlying any Crypto asset for any lawful activity

The bill empowers the central government to exempt certain activities in public interest like crypto mining, generating holding, selling dealing in issue transfer dispose of or uniting it as a medium of exchange, store of value and a unit of account.

The bill seeks to impose penalty for contravention of its provisions by individuals as well as corporate bodies the offences shall be cognizable and non-bailable. The regulator for currency will be RBI and crypto assets shall be regulated by market regulator SEBI.

Reason for bringing the law to regulate crypto assets is because it may pose a threat to financial stability and there is no law dealing with it, sources said. The bill also proposes to ban all private cryptocurrencies in India and facilitate regulation.