Digital Currency in India: The government is planning to introduce a law to ban all private cryptocurrencies such as bitcoin and put in place a framework for an official digital currency to be issued by the central bank, according to a legislative agenda listed by the government. The law will "create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI)," said the agenda, published on the Lok Sabha website on Friday, January 29. (Also Read: Bitcoin Falls 10% To $31,534 Retreating From Record Highs: All You Need To Know )
'The Cryptocurrency and Regulation of Official Digital Currency Bill 2021' listed for debate in the budget session, seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
In 2019, a government panel recommended banning all private cryptocurrencies, with a jail term of up to 10 years and heavy fines for anyone dealing in digital currencies. The panel has, however, asked the government to consider the launch of an official government-backed digital currency in the country, to function like banknotes, through the Reserve Bank of India. In 2018, the central bank ordered financial institutions to break off all ties with individuals or businesses dealing in virtual currency such as bitcoin within three months.
However, in March 2020, the Supreme Court allowed banks to handle cryptocurrency transactions from exchanges and traders, overturning a central bank ban. Many central banks across the globe are exploring ways to regulate cryptocurrencies but no major economy has taken the step of placing a blanket ban on owning them. The world's most popular cryptocurrency, bitcoin, is still not recognised as legal by many banks. Concerns have been raised about the misuse of consumer data through cryptocurrency and its possible impact on the financial system.
'The Cryptocurrency and Regulation of Official Digital Currency Bill 2021': Here's what crypto experts have to say on the new cryptocurrency bill proposed to be introduced by the government
Mr Sumit Gupta, Co-founder and CEO, CoinDCX :
"Since the government is considering introducing the bill during this session of Parliament, we are sure the government will definitely listen to all the stakeholders before taking any decision. We are talking to other stakeholders and will definitely initiate deeper dialogue with the government and showcase how we can actually create a healthy ecosystem in unison"
Mr Rahul Pagidipati, CEO at ZebPay:
''Bitcoin and most crypto assets are more like gold and not an alternative to government-issued legal tender. Crypto assets and digital government currency can coexist and together, they can bring tremendous benefits to the Indian economy.''
''We hope the Lok Sabha members and advisors will consult crypto and blockchain companies as they make their decisions. Millions of Indians have already invested in this new asset class. Millions more want the same opportunity to build wealth that investors in other countries already have. We have faith in the government and hope that this bill will move India forwards, not backwards.”