Last Updated on Nov 26, 2021 by Ayushi Mishra
The long-delayed cryptocurrency law has been included in the government’s legislative agenda for the Parliament’s winter session, which begins on 29 November 2021. The agenda for the session lists “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”.
This long-awaited law aims to establish a framework that would facilitate the formation of the Reserve Bank of India’s official digital currency. “The Bill also attempts to outlaw all private cryptocurrencies in India,” the government explained. “However, it provides for specific exclusions to promote the underlying technology of cryptocurrency and its purposes.”
This is the second time that the government has listed a bill related to cryptocurrencies for introduction in parliament. The same bill had been listed for the budget session of parliament earlier this year but was not introduced. Since then there has been considerable debate and discussion about whether India should prohibit cryptocurrencies entirely or begin regulating them.
After a recent review meeting by Prime Minister Narendra Modi, the government was planning progressive measures on the issue but unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing.
According to industry estimates, India has ~1.5 mn. cryptocurrency users with a total asset value of ~$ 6 bn. Prime Minister Narendra Modi has stated that Bitcoin poses a risk to the younger people. “It is critical that all democratic nations collaborate on this and guarantee that it does not wind up in the wrong hands, which may corrupt our kids,” the prime minister had warned.
The Prime Minister’s remarks followed the first digital currency discussion between business and government. According to sources, the group firmly believed that attempts to deceive the youth by over-promising and non-transparent advertising should be halted.
The Reserve Bank of India (RBI) has often expressed alarm about cryptocurrencies, claiming that private digital money threatens the country’s financial stability. After a spectacular climb over the last 20 mth, the market capitalisation of cryptocurrencies has risen from less than $ 500 bn. to about $ 2.5 tn. Bitcoin, the oldest and most valuable cryptocurrency, has seen its value increase more than 10x from the crash’s low in March 2020.
The conference was the result of a consultation process in which the RBI, Finance Ministry, and Home Ministry conducted extensive research and interviewed experts from across India and the world.
If you are new to investing in crypto or stocks and not sure about which between them is a safer investment, you might like this article.