Centre to ban pvt cryptocurrencies; introduce bill in winter session of parliament

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is among 26 Bills listed in the Government Legislative and Financial Business.

The Bill on crypto seeks to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. "The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses," as per a Lok Sabha bulletin.

Crypto markets crashed following news of the government introducing a Bill in the Parliament to prohibit all private cryptocurrencies in India, barring a few exceptions to promote the underlying technology of cryptocurrency and its uses.

The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 seek to create a facilitative framework for the creation of an official digital currency to be issued by the Reserve Bank of India (RBI). The bill seeks to ban all private cryptocurrencies in the country, but will allow certain exceptions to promote underlying technology and its uses.

Amid growing concerns around cryptocurrencies, Prime Minister Narendra Modi had on November 13 held a high-level meeting and comprehensively discussed various aspects around the emerging investment asset. The concerns around unregulated cryptocurrencies becoming avenues for money laundering and terror financing were also discussed.

"It is important that all democratic nations work together on crypto-currency and ensure it does not end up in wrong hands, which can spoil our youth," PM Modi said last week while delivering a keynote address at the Sydney Dialogue.

Reserve Bank of India Governor Shaktikanta Das has red-flagged cryptocurrencies maintaining that they are a serious threat to the financial system since they are unregulated by central banks.

Also, last week, the first-ever parliamentary panel discussion on cryptocurrency was conducted; where a consensus was reached that cryptocurrency cannot be stopped in India, but must be regulated.