Govt to bring Cryptocurrency Bill,prohibit private players

The Indian government will  introduce a Bill in the winter session of Parliament to bar all cryptocurrencies in India, barring a few exceptions, and create a framework to regulate digital currency issued by the Reserve Bank of India (RBI). In response, all major digital currencies saw a fall of around 15 per cent and more, with Bitcoin down by around 18.53 per cent, Ethereum fell by 15.58 per cent, and Tether down by 18.29 per cent. The Bill, titled “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”, will be up for introduction and passing in Parliament. According to a Parliament bulletin, "The stated intent of the Bill is to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India."  The new Bill seems to drawing largely from the recommendations of the SC Garg Committee formed by the Department of Economic Affairs, Ministry of Finance. The committee, in its report titled “Report of the Committee to propose specific actions to be taken in relation to Virtual Currencies”, had even proposed banning cryptocurrencies.

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. The RBI has been voicing its serious concerns on cryptocurrencies since 2017. In July 2017, then RBI governor Urijit Patel had told a parliamentary panel that the central bank was keeping a close watch on transactions involving cryptocurrencies. Earlier, the International Monetary Fund (IMF) had also mentioned that crypto-assets are extremely risky and that they need to be closely monitored since they hold the potential to disrupt various aspects of the global financial system.