India mulls ban on cryptocurrency with new law; check details

Daniel Fowler
January 31, 2021

However, Indian crypto professionals contend that Bitcoin and similar digital currencies are "public" and transparent in nature, and therefore outside the purview of the bill that applies to private cryptocurrencies.

"The bill also seeks to prohibit all private cryptocurrencies in India".

The Regulation of Official Digital Currency Bill, 2021 is likely to be introduced in the Budget Session of the Parliament, a Lok Sabha bulletin has said.

The Interministerial Group which has drafted the Bill has proposed a complete an on private cryptocurrencies in India citing the risks associated with them and volatility in their prices. "The Bill also seeks to prohibit all private crypto-currencies in India; however, it allows for certain exceptions to promote the underlying technology of crypto-currency and its uses" said the goal of the Bill in the papers placed before the bulletins. Is the Bill Positive or Negative for Indian Cryptocurrency Holders? The bill aims at establishing a facilitative framework for generating an official digital currency that is issued by the country's central bank, the Reserve Bank of India (RBI). While newly launched Sequoia-backed CoinSwitch Kuber raised $15 Mn led by Ribbit Capital and Paradigm, CoinDCX raised around $19 Mn led by Polychain Capital and Block.One in Series A and B rounds of funding. It is not offered or meant to be used as legal, tax, investment, financial, or other advice.

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For the past six-seven years, including India, many countries were looking for the introduction of the digital currencies, when Bitcoin-like crypto-currencies started flooding in the world and their trades became proffered in many sectors. Cryptocurrency exchanges responded with a lawsuit in the Supreme Court in September and won respite in March 2020.

The discussion of the bill will include two key topics.

Crypto industry professionals reacted to the news cautiously, asserting that bitcoin and other major cryptocurrencies were "public" in nature and hence not within the purview of the ban on private cryptocurrencies in the bill.

Meanwhile, an RBI booklet on payment systems, issued earlier this week, revealed the central government's plan to issue a digital version of the rupee.

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